Determining what to offer on a foreclosed home can be difficult.
There are a number of factors that a buyer should consider to determine how much to offer under a foreclosed property's price. While most buyers are interested in buying foreclosed properties to get a bargain, just because a property is a foreclosure does not mean that it has a bargain price. Buyers must carefully research the specific property and the local real estate market to determine a property's fair value and to determine an appropriate price to bid.
Professional Help
One of the most important steps in determining what to offer on a foreclosure is to hire an experienced real estate agent to assist with the process. An experienced real estate agent will be familiar with the local real estate market, know how willing specific banks are to negotiate on price and may have personal relationships with the banks offering foreclosed properties for sale to assist buyers in finding properties quickly. To find an experienced agent, buyers should look at local foreclosure listings to determine the local agents that banks frequently use as a listing agent.
Time on Market
One of the key factors in determining how much negotiation room a foreclosed property's price may have is the average time on market of similar properties. Banks are often more willing to negotiate price if they expect the property to take some time to sell. An experienced real estate agent can help a buyer determine this information for the local real estate market. In addition to looking at similar properties, buyers should also look at the time that foreclosures stay on the market before they sell.
Repair Costs
Buyers should have a thorough home inspection completed on any property they are considering purchasing. Banks are likely to have considered obvious repairs when setting the price of the foreclosure, but the bank may not have found all of the needed repairs. Buyers that find additional repairs can use this information as bargaining leverage to receive a lower price from the bank. Buyers should have documentation of the home inspection showing the needed repairs when submitting an offer to the bank.
Reasonable Offer
Buyers of foreclosed properties should only make reasonable offers on foreclosed property they are considering buying. Buyers who make offers that are significantly below the asking price may cause themselves some problems. Banks that are willing to negotiate the price of a foreclosed property may make a counter offer after receiving a reasonable offer from a buyer, but may simply ignore an unrealistically low offer. Real estate agents may also become disinterested in working with buyers who only make offers that are too low for the banks to consider.
Tags: foreclosed property, real estate, estate agent, estate market, experienced real, experienced real estate
