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Old 08-20-2010, 10:56 PM
 
Location: Kansas City North
3,995 posts, read 7,279,077 times
Reputation: 5773

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We’re trying to buy a foreclosure. The bank received another offer the same day as ours and now wants our “best and final.” All our agent was able to find out was that both offers were “close.” We originally offered full price, asked no closing costs and will only need a mortgage of 43% of the asking price. Customary earnest money here is $1,000 – we gave them $2,000.

We are going to up our offer to 1.2% over list price and increase earnest money to $20,000 (money we just have sitting in checking account from sale of our previous home). Assuming the other buyer is “average” – i.e., an 80% or higher loan, and normal earnest money, is our mortgage situation and gigantic earnest money check going to be able to overcome a higher price from the other guys? Or is it always just which one gives them the best bottom line?

Last edited by Okey Dokie; 08-20-2010 at 10:59 PM.. Reason: Formatting problems!
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Old 08-21-2010, 06:05 AM
 
Location: Cary, NC
33,489 posts, read 58,149,202 times
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Great terms from one buyer may trump the other buyer, but to some extent it is guesswork as to what the other party is offering for terms.

I like that 20 grand right where it is: In YOUR checking account.
But, your agent should be able to guide you.
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Old 08-21-2010, 06:38 AM
 
Location: DFW - Coppell / Las Colinas
31,817 posts, read 36,486,800 times
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It is the best bottom line that gets it and if you've read other threads you'll know it's not always the lowest price but many times which buyer is the most secure in getting the house closed.

I agree with Mike, $20K is unusually high in our area and a big risk to you if something bad were to happen that causes you not to be able to close. I might increase the EM maybe $2k more. Let your agent guide you on what's slightly above normal for your area and go with that.
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Old 08-24-2010, 05:31 PM
 
Location: Kansas City North
3,995 posts, read 7,279,077 times
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Update: we were the successful bidder! We are paying $56,000 less than what it sold for in 2007, and $30,000 less than what it's currently worth (according to my realtor). Since we lost $13,000 on the sale of our previous home, we're pretty happy.

Timeline: it went on the market Wednesday, we looked at it and made offer on Thursday, got request for our "best and final" offer on Friday afternoon, which was due noon on Sunday, and found out today (Tuesday) afternoon we got it. Happy happy!
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Old 08-25-2010, 01:05 PM
 
Location: Barrington
45,662 posts, read 33,923,145 times
Reputation: 15218
Quote:
Originally Posted by Okey Dokie View Post
Update: we were the successful bidder! We are paying $56,000 less than what it sold for in 2007, and $30,000 less than what it's currently worth (according to my realtor). Since we lost $13,000 on the sale of our previous home, we're pretty happy.

Timeline: it went on the market Wednesday, we looked at it and made offer on Thursday, got request for our "best and final" offer on Friday afternoon, which was due noon on Sunday, and found out today (Tuesday) afternoon we got it. Happy happy!
Congratulations.

You and the other bidder were the market and paid fair market, given the unknowns/uncertainties associated with REO properties.
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Old 08-25-2010, 01:21 PM
 
Location: Athens
470 posts, read 1,307,654 times
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Congrats on getting the home that you wanted. Looks like you and your agent had the winning tactic.
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Old 08-30-2010, 02:17 PM
 
Location: Kansas City North
3,995 posts, read 7,279,077 times
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Quote:
Originally Posted by middle-aged mom View Post
Congratulations.

You and the other bidder were the market and paid fair market, given the unknowns/uncertainties associated with REO properties.
You are correct and actually my realtor said, "$30,000 less than a similar property in a non-distressed situation."

It's only 3 years old and has been cleaned, recarpeted and repainted. My sister in law (who was with us when we looked at it) thought it was new construction. Our inspection Wednesday will reveal any hidden defects.
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Old 08-30-2010, 03:12 PM
 
Location: Chciago
721 posts, read 2,657,553 times
Reputation: 497
Quote:
Originally Posted by Okey Dokie View Post
You are correct and actually my realtor said, "$30,000 less than a similar property in a non-distressed situation."

It's only 3 years old and has been cleaned, recarpeted and repainted. My sister in law (who was with us when we looked at it) thought it was new construction. Our inspection Wednesday will reveal any hidden defects.
Got one tip for you, make sure you get a good home inspector. Lots of home inspectors just kind of go through the motions looking for major defects but really aren't that thorough.

If its new carpet, paint, etc odds are it was done by the bank. These contractors know the bank isn't going to scrutinize the bank just want it to look good cosmetically.

I bought a short sale that the bank had done some work on. Dont get me wrong I'm not complaining b/c I got a good deal nad it was nice the bank did some work to the place, carpet, new paint, etc.

THe contractors also cut corners though. There were two lights in my place that had no wiring going to them. I also had an outlet box with no wiring to it. I also had a small plumbing leak in a wall that couldnt be discovered just from running the faucet for 5 minutse but from using it everyday living in there it leaked onto my wall.

Get a thorough inspection to catch thing like this.
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