How low can I offer on a foreclosure?

[Sara Abernethy]

I'm looking at buying a 2BR 1.5BA foreclosure that is listed for $79k. There are three identical units. Cash is required and I'm prepared to pay cash. I was able to see the inside. Some work is needed but less than $10k. I'm going to rent it out for $800-950. It's in a nice area where there aren't a lot of foreclosures. The properties in the area are about $120k and a bit larger than what I'm looking at. Market value is prob $90-100k for these places. Since it's a bank I'm negotiating with I don't feel bad low balling. They have three of these places to unload and they've been on the market for 180 days +. How low can I go? What would you dare?

[David Krulac]

@Sara Abernethy

Offer what price makes the deal work for you.  Don't overpay, there will always be hidden costs in foreclosures and REOs.  The properties have typically been vacant for at least a year and here in PA, that means that they were through the winter without heat and have possible freeze damage.  The safest way is to have the utilities turned on, have a professional home inspection and make the contract contingent upon the inspection.  Mechanicals, heating, plumbing and electric should be inspected as well as appliances and roof.  I think that I've replaced roof on 18 foreclosed houses so far.