HELP!! Making Offer Tonight

We are meeting with a Real Estate Agent to make an offer on a house that is in foreclosure or pre-forclosure.
The bank hired the listing Agent, so the offer will be presented directly to the bank. This will be our primary residence.

Our Agent told us that the selling Agent said the bank is willing to take a loss.

Balance owed $130,000

The house will appraise for about $134,000 or higher.
(Comps and tax for 2005 says $130,000)

We are asking the seller, the bank to pay all closing cost.

The Selling Agent said to bring in an offer and the bank will accept or counter offer.

On one hand we are thinking of offering $100,000 but will not go above $105,000

On the other hand if they agree to pay all closing cost then offer $120,000

I had one person advise us to offer $85,000 tell them take it or leave it.

“Our” Agent suggested $130,000 (I know the more we pay the higher his commission)

The current occupants are in the process of moving out.

I would appreciate any guidance and advice.

Thank you,


Depends on what you’re going to do with it…if you’re going to fix it and flip it, the conventional wisdom says:

(FMV X70%) - (Repairs + holding costs)


$134K X 70% - Fix-ups and holding (which you don’t even discuss)

$93,800 minus fix-ups and holding

Your Realtor doesn’t “get it”…

You can go a little closer by using 80% but it gets really thin from there…you gotta have some room to move the property. If you have to hold it, the holding costs (PITI, loss of use of the money, utilities, etc.) will eat away at your profit.


Holding costs aren’t relevant. They are making it their primary residency. I’d still use the 70% - repair costs to make your offer though. Start low and let them counter.

You’re right Marcus…I missed that.


Okay, I appreciate the advice. We whimped out and offered $125,000 with the Bank paying all closing cost.

We are expecting a reply NLT Friday.



With your private residence, it’s worth to you what it’s worth to you…it’s less of a business decision than buying an investment property…