Friday, May 8, 2009

We want to put a REALLY low offer on a home that has been in foreclosure for 2 years what is too low?

This question was posted on Trulia, Here is my response.

There are two ways you can look at a house when you make an offer on it. The first is as an investment. Your offer is based on the numbers. If things don't work out you move on to the next one and so on until you get an offer that works. With this approach you might be willing to make a very low offer because it's no big deal if you lose it. Make enough really low offers and you'll get lucky every once in a while. If a house is a really good buy at the list price it is probably obvious. In that case even an investor might make a full priced offer.
Most people, even investors, have an attachment of some sort to the house they are trying to buy. Once you put the effort into evaluating a house and making an offer its probably a waste of time to make a very low offer. You need to look at the market and decide if it's a good deal. If the house is priced right and if you would feel bad if someone else got it for a dollar more than your offer, make a higher offer.
Ask the agent what they think. If your agent is not the listing agent ask him/her to ask the listing agent for you. Just by asking the question you might find out things that will help in your negotiation.
Looking at the homes on the market in Robbinsdale I can see there are 28 homes under $100,000. There are also a lot of new listings. You should take into account the prices of other similar options.

No comments: