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by Scott Godzyk

landlord helpOne of the largest myths in making offers to bank owned homes or even a short sale, is the media or these late night infomercials telling buyers to offer a certain percentage off the asking price of a property–especially bank owned homes.

You should never base your offer on a percentage off an asking price. You do not know if that asking price is at market value, if it is priced way above market value and your percentage off may be too low or the asking price is already below market value and your offer would be way to low.

You need to assess what that house is worth in today’s market and base your offer on that value. You need to also check on some variables that could affect your offer –first ask if any other offers have been submitted, if any of those offers have been counter offered or if any have been rejected, and ask what price they were at. If you have offers already submitted, chances are you will not be able to steal the property as you would if there is no interest.

The next key is writing an offer the bank will accept –keeping it free of contingencies will make your offer stronger. The bank will always take a cash offer, no contingencies and a quick close over a higher priced offer with contingencies or a mortgage and any inspection contingencies.

The bottom line is never make an offer without doing a little homework and never automatically deduct a percentage from an asking price until you have assessed what that house is worth in today’s market.

Copyright 2011, Scott Godzyk. All rights reserved

Scott Godzyk is one of New Hampshire’s leading bank owned home brokers.  For more tips on buying bank-owned properties, see Scott’s blog or visit his website, ScottSellsNH.

 

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  • Thanks for the article. I have not purchased a REO yet but with the current market conditions I expect I may soon.

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