Tips On Making Offers For Bank Owned Foreclosures

Making a purchase offer for bank owned foreclosures should be planned meticulously if a buyer is really interested in acquiring the property

. There are tactics that they can use to make sure that the seller will entertain their offer without making it hard for them to pay for the whole purchase amount.

Basis for the Price Offer

The amount of a buyer's offer will be greatly affected by the number of bidders for the property. If there are more than five bidders at one time for a particular house, then it can be considered a tough competition, particularly if real estate investors are involved. Generally, banks will consider the highest offer, but there are circumstances when they will go for a lower offer depending on other factors.

When formulating an offer, the buyer should try and find out how much the bank spent or lost to acquire the property. They should also research the prevailing market price for similar properties in the neighborhood and get the amount in between the prevailing market price and the amount spent by the bank and make it their offer price. In addition, an offer should be at least 20% below prevailing market prices to make it a good foreclosure deal on the part of the buyer.

Improving One's Chances

Despite making a relatively lower offer for bank owned foreclosures, some buyers are able to get the property they wish due to a number of important factors. One is good credit standing and the other is accepting a financing package offered by the bank that is selling the home. Another way is to hire a real estate agent who has a direct association with the seller bank. This way, the buyer will only have to pay one commission and will also benefit from information on properties that will be sold by the bank even before they get listed.

When making offers for bank owned foreclosures, a buyer should never make a bid that is beyond his capacity to pay. To get the better of his competitors, he should try to find out as much as he can about the property and the bank selling it.

by: Joseph B. Smith

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