Bank Owned Foreclosure and Offers

6 Replies

Question BP family, Do banks ever accept cash offers less than they get a property back for? For instance, I’m looking at a local foreclosure and the price is $90k, and the county website shows they took back the property at 90k. Do they ever accept lower offers if paid in cash?! The ARV should be around $160k to be safe and needs around $25k in repairs. Thanks!!

Everyday if the numbers work. If your ARV is $160K and needs $25K in repairs, chances are their numbers are the same so, for your scenario, I don't see that happening. They are going to sell it for market value and doesn't sound like market value is less than $90K.

@Nick Dillaha You're evaluating this scenario completely wrong, The bank will accept offers close to what the property is worth today, The price in which they took the property back will not weigh on the Asset Manager as he's pricing against the current market then expecting investors to come in somewhere between current value and current value plus estimated repair cost.

I bought an REO from Bank of America that they listed at $199,000, Because I know my market and looked at Comps, I knew this property was priced a little low to attract buyers, I also know most buyers are inexperienced buyers only doing what they are told to do on the many websites and that's offer much lower than what the bank is asking and not looking at all other variables in the deal, I offered the $199,000 the bank was asking and at closing the property appraised at $225,000.

I had no problem paying the bank listed price especially when it resulted in me getting $26,000 in equity from day 1.

Could I have gotten it for a lower price? Maybe but then that would have meant a risk of losing the property to other bidders and giving up the property I knew was underpriced.

What is the property currently worth?  

Hey @Ray Johnson , thanks for your response. The ARV is $170k, but the home needs a total rehab ground to ceiling. My end goal is to sell it after the rehab, I just didn't want to waste anyone's time making an offer lower than what the bank took it back for if that just doesn't happen in today's market. Asking is $90k, rehab $40k? (It's a 1021 sq ft box), + realtor/holding/closing/unexpected costs... My realtor stated it won't go for near asking price and that because It's a total gut that they'll probably accept an offer based on the land only. Thoughts?

I’m assuming you’re renting the property you mentioned? 

@Nick Dillaha depending on how long the Asset Manager has been holding this maybe you can offer much lower, Are you looking to offer more than 15% below list? The location and activity in that market will also play a part in the Asset Manager decision to accept more than a 15% discount. Because of the price point of this property you'll be limited to how low you can go. The Asset Manager can't go to him VP and say he sold a unit for 50% of list. The answer is yes, the property I got for $199,000 from Bank of America I put $27k into and it appraised at $305,000 after rehab. I purcased it to add to my Buy and Hold portfolio but I have been thinking about selling it to take the money now and move on to the next deal.