Questions About Making My First Offer

11 Replies

I'm making my first offer on a property Monday.  It is currently bank owned and they have been doing tons of updates and are still in the process of doing more and all will be completed before a new owner would take over.  They are also paying off all the back property taxes owed.  

There is one thing that I will be doing if I buy it which will cost around $2k(This is a $200kish property).  Should I include that in my offer? If they do concede that in the final deal, will they basically be adding $2k to whatever their final number really was? So that in reality, I'm not getting a discount at all besides the fact now I'm not 2k out of pocket my first month, instead it's effectively in the mortgage?  Same question with closing costs.

@Matt Sterling - Is this an investment house? Are you concerned that the bank is making the repairs and potentially benefiting by selling the property at a higher price?

I don't particularly like these, as the 'repairs' and upgrades can be shoddy.  They are going to put some lipstick on it to get it pretty for sale.  Question all major improvements/repairs @Matt Sterling .  Get a quality inspection done at least!

Originally posted by Account Closed:

@Matt Sterling - Is this an investment house? Are you concerned that the bank is making the repairs and potentially benefiting by selling the property at a higher price?

 Well say the bank is planning on accepting an offer for 200k, If I gave them an offer for 200k and included that I wanted them to do this 2k repair, are they usually not going to accept and come back at 202k firm?   The only advantage I'm getting by asking for them to pay for that repair and closing costs would be I'm not out of pocket that money, its basically factored into the purchase price and therefore in the mortgage.  

Originally posted by @Steve Vaughan :

I don't particularly like these, as the 'repairs' and upgrades can be shoddy.  They are going to put some lipstick on it to get it pretty for sale.  Question all major improvements/repairs @Matt Sterling.  Get a quality inspection done at least!

 For sure, I'll be getting an inspection done.  

In my experience banks are not really interested in making repairs on REO properties (unless it is required for financing). I would bet that you would be better off making an offer for 2k less, but that's just speculation on my part.

- Justin

Most REOs that have been improved for end buyers, will assume that closing costs would be involved.   In regards to the $2k just make your offer $2k less.   The market will speak and in regards with REOs,  they will most certainly come back with best and final even with end buyers if they have multiple offers. 

So make your offer of $198k and 3% closing and if they come back with best and final you may have to come up if you really want the property.  

As one mentioned I wouldn't trust REO improvements. Every REO I've bought was improved to hide something (typically mold, busted pipes, etc). All mine have been in poor shape and not for end buyers but recently painted REOs or new drywall is always a concern for me these days.

Well I was going to make an offer tomorrow but now see a sex offender's last known address is in one of the units.  Was pretty excited about getting this process moving too. Hopefully he is on month to month and they can get him out. 

Originally posted by @Matt Sterling :

Well I was going to make an offer tomorrow but now see a sex offender's last known address is in one of the units.  Was pretty excited about getting this process moving too. Hopefully he is on month to month and they can get him out. 

Matt - is this a condo???? If so - 200K is a lot of money. What are HOA dues?

Originally posted by Account Closed:
Originally posted by @Matt Sterling:

Well I was going to make an offer tomorrow but now see a sex offender's last known address is in one of the units.  Was pretty excited about getting this process moving too. Hopefully he is on month to month and they can get him out. 

Matt - is this a condo???? If so - 200K is a lot of money. What are HOA dues?

no this is a multi

The guy has been in two years with no problems.  Regardless, I don't want anything to do with him as he was convicted of child molestation and I read part of the case report.  This sentence I found is pretty bad.  "In addition, the trial court noted several other aggravating factors, including Bigelow's failure to successfully complete probation, his pattern of physical abuse toward women, his history of substance abuse, evidence of multiple instances of molestation toward the victim, and his violation of a position of trust."  

I still haven't heard his lease status yet. 

Lease isn't up til feb.  Sigh

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