Negotiating with banks? Worth it?

Question

Any tips or advice on how to negotiate with banks? Is it even worth the time or are there tried and true methods? I'm looking at a foreclosure that I want to take off their hands, but it wouldn't be worth it if they won't take 20-30% less! Thoughts, suggestions?

Shane M · Answer

Exactly Harrison, thanks!

Harrison Painter · Answer

Be sure to factor in your rehab costs.....

Harrison Painter · Answer

Yes....It is worth it....it is not always an easy process, but there are some great REO deals out there.

Banks want offers with little to no contingencies. So it needs to be as clean as possible to improve your chances.

For price, it basically comes down to what the property is worth to you and your strategy.

In my market, when a bank owned home hits the MLS, and it is priced well, it will get sold right away. If we wait, we lose......

We will usually offer our highest and best, and the bank can take it or leave it. I see too many people trying to low ball offers and they lose out on very profitable deals.

John Andre · Answer

My point exactly Harrison. 30% might be a low ball offer. Submit that and you may not be taken serious. Wait a bit and it will come into play with in your guide lines. REO are priced good. The seller will never see it, and is relying on the BPO for pricing. If it does sell fast, the broker that did the BPO was right on and the bank is happy. And your 30% off was a low ball.

Shane M · Answer

Great discussion, there have been two sales in the neighborhood for lower than the price the bank is listing 50 and 54K, (bank is listing at 57 currently). But there have also been sales for 90-100K in the same time period. I guess it couldn't hurt to make an offer for 30% down from 57 or even 50. The property has been on the market for 31 days.

John Andre · Answer

How long has it been on the market? Banks are aggressive to move property once it hits the mls. Every 30 days there will/should be a price reduction, after 90 days allot of times the bank, or AM, asset manager will give the property to another agent with a big reduction. To go in and just offer 30% less when it is new on the market might be premature. Let it sit for a while. The price will come to you if no one else buys it first.