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Updated: How do I know what to offer on a house that needs work?
Posted on 6/1/11 at 8:51 am
Posted on 6/1/11 at 8:51 am
I'll look like a fool offering too low. (The house is on short sale, so I'll be negotiating with the bank.)
It will need a lot of work/repairs. But for a low enough price, I would not mind the work.
So should I low ball, giving myself wiggle room if the bank counters? or have it appraised (and I'm not sure when the appraisal step happens in this process).
signed,
1st time buyer.
EDT: Bottom of page
It will need a lot of work/repairs. But for a low enough price, I would not mind the work.
So should I low ball, giving myself wiggle room if the bank counters? or have it appraised (and I'm not sure when the appraisal step happens in this process).
signed,
1st time buyer.
EDT: Bottom of page
This post was edited on 6/8/11 at 4:50 pm
7
Posted on 6/1/11 at 8:59 am to Bovina20
add up the cost of work needed to get the house in normal sellable condition at the normal sellable price of today's market. 
Posted on 6/1/11 at 9:01 am to Bovina20
Asking price - cost of the work = your offer
Posted on 6/1/11 at 9:38 am to Blakely Bimbo
quote:
First thing you need to do is determine if the house meets FHA standards
It does not.
I'll be calling banks today.
Posted on 6/1/11 at 10:16 am to Bovina20
I would look for comparable homes in the area that do not need work. Figure out a median price, then subtract the total cost for repairs, and then shave off another 5% for good measure.
I think this would only apply if the house actually needs repair type work. If by work you mean, you think the kitchen needs "updating" then just low ball them and see what happens.
I think this would only apply if the house actually needs repair type work. If by work you mean, you think the kitchen needs "updating" then just low ball them and see what happens.
Posted on 6/1/11 at 10:20 am to Bovina20
Make your offer subject to inspections with a 10 to 14 day window. Prepare your inspections and estimates to forward to the bank. These bank folks are not emotional but rather matter of fact. They see low offers on all of their properties. You must stay rooted in facts to be successful in a REO situation. They already know if a property will stand up to FHA standards or not. Some times the bank needs to paper the file or let the listing get seasoned a bit before they let it go at a much lower price than they have it on their books for. Be patient and you will do ok.
Posted on 6/1/11 at 10:32 am to TigerDeBaiter
I
Bathrooms need updating, but they also need repairs. So I'm going to compensate for all of that. Kitchen needs new cabinets (cabinets don't fit/won't shut correctly right now).
quote:
think this would only apply if the house actually needs repair type work. If by work you mean, you think the kitchen needs "updating" then just low ball them and see what happens
Bathrooms need updating, but they also need repairs. So I'm going to compensate for all of that. Kitchen needs new cabinets (cabinets don't fit/won't shut correctly right now).
Posted on 6/1/11 at 11:05 am to Bovina20
quote:
I'll look like a fool offering too low.
Not as big a fool as if you offer too high. Seriously, don't worry about that at all.
Posted on 6/1/11 at 11:15 am to Korkstand
You can always go up from wherever you start.
Posted on 6/1/11 at 11:34 am to Bovina20
quote:
I'll look like a fool offering too low. (The house is on short sale, so I'll be negotiating with the bank.)
A few things:
Get a certified inspector to list, document and estimate the cost of the required repairs. The 200 bucks you spend with a certified inspector is well worth it. Subtract that from your offer price as if the house required no repairs.
Since you are negotiating with the bank, be aggressive and time your negotiations toward the end of the quarter. The bank is looking to get distressed property off the books ASAP. I would definitely "low ball" your number however don't do it blindly. Have a justification for your number then go lower. Justification includes comps, repairs, neighborhood, termite certificates, structural issues, etc. Spin it in your favor and try very hard to not let emotion take you over. It's definitely a buyers market and buyers have the advantage. Just my $0.02.
Posted on 6/8/11 at 4:34 pm to Bovina20
Bank wants everybody's best offer. I don't know how many offers there are right now on the house. I already put my inital bid down a few days ago. So now its merely an auction.
Posted on 6/9/11 at 8:12 am to Korkstand
quote:
Not as big a fool as if you offer too high. Seriously, don't worry about that at all.
This.
Posted on 6/10/11 at 5:45 am to GulfCoastPoke
Get a legit contractor to give you a price for repair and inspection. Not a home inspector(most of those guys do not know a rafter from a joist.)
Leave yourself some contingency money,
Make sure it will be FHA approved
Market price-less repairs-contingency= top dollar you should pay
remember the bank wants out of this deal!
Leave yourself some contingency money,
Make sure it will be FHA approved
Market price-less repairs-contingency= top dollar you should pay
remember the bank wants out of this deal!
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