Bank foreclosure listed for 90K
Needs about 45-50K rehab/clean up.
Comps 125K conservative
We would buy and rehab with cash but would take a good amount of time and work.
Should I offer the bank 45K?
It's been on the market for 2 months.
Have you ever had luck with offering a bank 1/2 price? Ive never tried starting out that low.....
I'm new but if my math is right, 38k would be what many would say don't go over. 70% ARV-repairs comes to $37,500. Any feedback from the pros? Like I said I'm learning....
how long has it Ben on the market?
Is 125k the ARV?
That is a lot of repairs what all does it need?
If the home is newly listed your probably wasting your time.
I make offers from MLS fairly regularly. Its a low percentage ballgame in a hot market, but it still works if you fire enough of them off. I do wonder sometimes if whoever decided the listing price was smoking crack when they did. I quit even looking at HUD stuff because they are so far off the mark most of the time around here.
I make offers at my numbers if I see a situation I can remedy. Just being bank owned doesn't do it. If it needs big repairs it will definitely narrow the field of buyers, but keep in mind the yahoos setting the price dont have a clue what it costs to fix them. Doesn't hurt anything to make the offer at half listing, I've done worse if I think they've mis-priced it that much and its been sitting, but my agent usually shoots them an email or calls to check the situation before writing things up. I do a lot with my agent, though, so she doesn't mind doing that kind of stuff she probably wont get paid on. Most agents will look at you funny if you tell them to offer half the listing price. Mine actually gets laughed at on some of what we send in. Gotta use your numbers, though. So the answer to your question is NO. Don't offer $45k if your 70% less costs is $37,500. I'd question your rehab numbers, though. That's a huge renovation on a smaller house, which I'm assuming is the case at $125k. I've cheated on the 70% at time or two, but only when its close to home and I liked the project. The biggest/most consistent mistake I see newbies make is altering their numbers to make them fit the deal. Hell, I've been guilty of that when I haven't bought anything in a while. Usually comes back to bite me in the ***.
Time and circumstance changes things when you're making offers, I've had them come back several times after rejecting my original offer. I probably make 40+ offers to get one accepted right now. So much of that depends on your market, you could buy them all day long at 65-70% in MLS here before the hedge funds came into town about a year and a half ago and started buying everything in sight.
It's been listed over 2 months.
A 1,990sf 4br/2ba but neglected.
Feel pretty good about the repair estimates. Darrel, that was encouraging. Thank you again. More offers sounds like a key.
Any other advice appreciated.
I've never gotten half but I've gotten about 1/3 off in 2010 in a really great community in Baltimore (Canton). Those days are long gone for us though.
offer and see what happens
@Andrew Nissen The beauty of REI is that an offer only costs you a little time, and no money. The bank will accept or reject based on many factors, including the number of nonperforming properties they are holding, how long it was listed, etc. Don't fudge the numbers to make a deal work, offer what you need to make a profit.
A 50% offer has a lower probability of acceptance. But I never fail to make an offer just because it is too low. I offer what works, then wait to see. As @Darrell Shepherd said, I've had banks come back later asking if I was still interested at that price. And being the way I am, I counter at an even lower price by at least a few thousand.
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