For a property that’s listed @ $20K is there any thing I can I can ask the bank to do? I.E. New tub, toilet, or offer a lower price? This is a foreclosure.
A bank isn’t interested in making the house nice for you. They’re interested in getting it off their books because it’s a non-performing asset until they sell it. If the house isn’t worth 20k because of the work needed, try to negotiate it down. Most banks list their stuff really high and it takes awhile to work the price down. I’ve bought houses for 50% of what the bank originally asked, but it took some time for them to come down to that price.
Not all foreclosures are equal. HUD is different from Fannie Mae is different from a bank foreclosure. Feel free to correct me if I’m wrong, but I’ve been told that HUD will only accept lowest 88% of the asking price (including commissions) meaning their bottom line that must be met is 88%. I’m sure there are more differences…I’m learning as I go along too
Cad you are right somewhat. I’ve found that HUD bottom line is 86.5% and if the Realtor wants commission they have to work the numbers backwards from there. Now with that being said, I make multipule HUD offers each day (I’m a broker) and bought a HUD home 3 weeks ago at 23% of list price. You can find a sucker in the batch every once in awhile.
House is worth $52000 and bought it for $6000. Outside paint is all it needs. Home run :beer
They don’t come very often though.
As for the others you just gotta make low ball offers and see where they go.
u r rite most of the people capitalizing their money by using these tactics now a days in real estate and foreclosure property has benefited them alot.
Days on Market (DOM) is very important as well, in terms of the percentage of list price that will be accepted. It’s always a good time to bid right after a price drop, which often happens in 30 days increments with the big govt sellers (Fannie, Freddie, HUD). Not only is the price now lower but the percentage-of-list will drop as well.
Also good to continue to monitor “pending” properties. Many of these fall out of escrow these days, for asundry reasons, and the bank may be more pliable on a lower offer right after losing their buyer.
But many people do find the 85% area to be a sweet spot for getting “most” deals done.
Though I’ve seen more and more REOs going at list price in the more competitive areas, so you need to have your ARV/comps and rehab estimate down cold, and if the property warrants it, make an aggressive bid.
You really need to have your top dollar in mind anyway, since decent properties will often solicit a call for “highest and best” bids from the listing agent.