BiggerPockets

I am interested in purchasing a property that was recently bought at a sheriffs sale by the bank. Any advice on how to approach the bank/start negotiations? Do I need to bring in my attorney this early in the process? Should I purposely make a crazy low-ball offer to start? I have heard stories of banks taking big losses just to get properties like this off their balance sheets. Any input would be appreciates.

Mike said it "patience" is key. Here is a summary of my latest experience.

My wife and I have been following a house for over a year now to purchase as our personal residence. We first saw it in February 2008 and the owners had just moved out. Moved out is putting it lightly; they left and were no where to be found. They cut off all communication with the listing agent and everything. They didn't trash or damage the house but they did take the appliances and some fixtures. We did put in an offer but since the bank did not own it yet they couldn't do anything without the owner's signatures, and as I mentioned they were gone.

So we waited, and waited. Finally in November the bank said they were going to forclose. Unfortuanately that is when the proverbial s*^t hit the fan with the economy and the bailouts started. Our county placed a moratorium on foreclosures due to the government trying to save everyones mortgage. Finally in February of 2009 the house was sold at auction.

I would say there are $20k to $30k worth of repairs to bring this property back to life but Fannie Mae has the house listed about $10k to $15k below ARV and has already turned down 2 investor "low-ball" offers. The bank is going to make some improvements to get it to FHA standards but I don't see them lowering the price very quickly on this one.

Hey guys thanks for the input. My situation is similar to yours Corey. I originally found this house back in August 2008 on craigslist. It was a FSBO so I was working directly with the owner and my attorney. The owner was very dishonest and eventually my attorney flushed everything out. When all was said and done, based on the "deal" she made with me, she needed about $9K (mortage debt/back taxes/etc) extra to close. Obviously she didn't have this extra cash lying around, so the deal fell through. She has since dropped off the face of the earth.

I have been following this property closely over the past 6 months and it was just bought by the bank April 6 at auction. I have already talked to the attorney representing the bank prior to the auction, so I have all his contact info. Should I contact him again to negotiate buying the property or do I need to get my attorney involved? I want to try and get this property ASAP as opposed to letting it sit there for months and deteriorate. It is flying under the radar right now as I imagine most people don't know as much as I do. I think this could be a good opportunity for me to buy. I have already had all my inspections done back when I was first going to buy it.

Any advice on how to proceed from here? I want to be patient but at the same time I want to get moving on this opportunity.

Hey Corey thanks for the insight... I talked with an attorney today who gave me some inside info on the property. The house was bought by the bank for 13K at auction. There were no other bidders. If there were any other bidders, the bank would have let it go for 35K. There is 76K of outstanding mortgage debt and the market value is 46K. Any thoughts on what I should offer? The attorney said banks usually sell for market value. However, I'm not sure where they got the market value number b/c the county website has it listed at 70K and I got an appraisal about 6 months ago for 90K. Is there a chance the bank will get an appraisal and realize their "market value" is way off? If not I can get a hell of a deal on this property should I be able to purchase it for 46K. That would be a pretty big loss for the bank though (30K), but I guess maybe they probably have bigger problems to worry about.