Bank Owned Homes (foreclosure, 5%, negotiation, sales)

[glastron_79]

At what % of the list price do these usually sell at? Is there much negotiation room, do they sell at list or possibly even higher? I realize it depends on the home and location, just trying to get a general idea.

Is there a lengthy wait like short sales?

TIA.

[Mike1306]

I don't think there are any concrete numbers on % of list.
I have seen some go at list and others at 15% under.
Some banks will lower the list by 5% a week til it sells.

As far as negotiation it all depends on your motivation.
If you find a house you like but could live with out it and there are similar homes around you can lowball and see what happens.
If it is the only foreclosure in the area and it is 25% below everything else you could lose it to someone else if you try and play too many games.
The wait is no where near what most short sales are these days.

[Bazzwell]

There really isn't a magic formula as each one has different problems associated with it. How much the bank has in it, how long it's been on the market, what kind of offers, what are the particulars of the offer, endless.

I've seen the bank come back with counters over asking price because the buyer wanted seller assist. On the other hand, I've seen them take much less because the buyer offered cash and a no inspections close. It almost comes down to a staring contest, who blinks first.

Line up all your ducks before you wade in. Get pre-approved or have your cash in one spot. Be prepared for things like a five day window for any inspections you need, a thirty day or less close from the date of acceptance. Some lenders require you fill out a loan application with them to even consider your offer although you're under no further obligation. Make your offer no more than 10% off current asking price and be prepared for a counteroffer.

One other thing that needs to get passed around more. If the home can't be lived in, chances are excellent that no lender will provide you with a loan. This has happened a good bit around our area recently. Vandals steal the copper, no plumbing, no loan regardless of sale price versus actual value. However, if your credit situation is good enough, you might get an FHA 203K rehab loan. You need at least a 620 score to qualify.

Know your market, do some research. You'll be better prepared to spot a deal when it comes along. And they do come along.

[Brandon Hoffman]

Sorry, can't even ballpark that for you. It's all over the place, varies by bank, location, price range, etc.

It can be lengthy wait but not normally as bad a short sale. Figure 45 day close best case, expect 60 days.

[tamitrail]

I have seen bank owned homes now advertising: "will receive answer from the bank within 5 days." I guess that is becoming the norm here so people who are interested will make an offer.