Bank foreclosure what to offer?

i have a bank foreclosure right by me the house was built in 2000 very nice house its around houses priced well above 200k they have it priced at 149k and the bank bought it at the sheriff sale for 114k so i was wondering if the 149k price would be negotiable or do you think they are going to be pretty firm on it? also i have someone who is willing to work out a contract to just rent or a rent to own and they are able to pay over 1000 a month rent who may be interested in this so i was wondering if this would be a good or bad idea to try and get this house then work out a deal with them figure that way they would be paying the house off for me any input would be appreciated thanks

Bill Gulley

Real Estate Investor · Springfield, Missouri

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Dec 11 '10, 06:07 AM

Banks are not supposed to be in the real estate business, I would offer what they have in it, maybe a couple grand more to set off any taxes and fees. If I knew the bank, I'd go there in person and make my offer. Good luck...

Mark Updegraff

Multi-family Investor · Rochester, New York

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Dec 11 '10, 06:15 AM

First off, you're going to want good tenants, and you're going to want to qualify them first. Don't take their word on how much they can afford, check them out. Landlording for Scrupulous Landlords is an excellent read.

About the foreclosure.

You state, "the bank paid 114k"

I don't believe banks go to auctions to buy property, banks don't want to own property.
The bank that "bid" on the property is bidding to protect their interest. Suppose bank has a first position lien on the home and is owed 100K. You better believe they are going to be there bidding up to 100k (sometimes they will take a little loss, depending on the area, inventory, days on market etc). Since no one out bid the bank at auction they're putting it back through the MLS and are paying more fees (brokers, holding costs etc) so they need to get more than the 114k.

I recommend you spend A LOT of time reading up on RE investing / foreclosures etc before purchasing anything.

Bill Gulley

Real Estate Investor · Springfield, Missouri

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Dec 11 '10, 06:35 AM

carry this on down the hill....I would assume you knew about the deal from your position. If it is listed, you'll be paying more as Mark said. There could be other liens held by the bank as well.

Let's say you buy it. To sell on a lease option, you'll need to check on the SAFE Act in your state since it is a non-owner occupied property.

Let's say you sold it or you rent it. Are you sure you want a tenant next door? I sure wouldn't! Let alone a borrower.

Every time a faucet drips they will be knocking ojn your door! Are you going to foreclose or evict a neighbor? So, the people across the street lose their babysitter, the guy on the other side of you loses his lawn boy, both being the kids of your tenant/buyer, your wife really can't have a neighbor since the business relatiuonship exists and you're going to kick them out?

If you want to buy it, list it and sell it that might be one thing, but living with a tenant or borrower/mortgagor....I'll never be so hard up.

I owned a house across the street from my home for almost ten years and never rented it! Mainly for that reason. My wife used it as a bid doll house since she has a new toy to decorate. Don't ever do that either! I did sell it and made money, but that's not the normal investment strategy!

Mitch Kronowit

SFR Investor · Orange County, California

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Dec 11 '10, 06:44 AM

Originally posted by Chris C

they have it priced at 149k and the bank bought it at the sheriff sale for 114k so i was wondering if the 149k price would be negotiable or do you think they are going to be pretty firm on it? also i have someone who is willing to work out a contract to just rent or a rent to own and they are able to pay over 1000 a month rent

First off, everything is negotiable. Second, who cares what the bank paid for it and what the list price is. You have to figure out how much it's worth to YOU. Thirdly, nobody cares what your prospective tenant may be able to pay, you have to figure out what the market rents in that area are.

Now, all that said, work backwards starting with the market rent for your area and figure out the most you're willing to pay for the house. Offer that or a little less if you want to haggle.

Let us know what you come up with and good luck.

Dale Osborn

Mobile Home Investor · Spanaway, Washington

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Dec 11 '10, 04:32 PM

If there is a realtor in the middle - they have a conflict of interest as they will not like to see low offers. The want the higher price so they can get the higher commission. If you can eliminate the stumbling blocks in the middle - you will get somewhere. Low offers may never even leave the realtor's office.