How to make an offer on a Bank Owned Property

Published by julia | Filed under Buyer / Seller Tips, Market Trends, Miscellaneous, Pinellas County Homes, Real Estate

You’ve done your research and found some listings for bank owned homes. You’ve gone through the homes and had an inspection plus an appraisal done. Now you’re down to one of the last steps which is making an offer for the bank owned property that you’re interested in. there’s no need for you to be worried even if you’ve never done anything like this before.  Here are some things to follow to make sure that you make the right offer for the property you want.

1.    Do the math. At this point you should have the numbers that the bank has provided (break even amount, foreclosure expenses etc.). Now it’s your turn to do some calculations. Take the break even amount; deduct the other expenses given by the bank and the amount for projected repairs plus additional expenses as well. The amount you come up with is about the same amount you should offer.

2.    Compare numbers. Now you need to make sure that you compare the price given during the home appraisal and the amount you are going to offer. See to it that you are not offering an amount which is higher than the appraisal. If you give a higher offer than its actual worth, you will not be able to negotiate a lower offer.

3.    Double check your bid. To make sure that you are offering an amount that is low, but not too low. See to it that it is about 5%-30% lower than the estimated market value. You can try and take the percentage of your offer compared to the actual market value and see if it is within the same range.

4.    Make your letter. It is standard procedure for interested buyers to put down their offer in the form of a letter. You should make your offer as straight forward as possible, avoiding any beating around the bush. When you let them know about what you are willing to pay, see to it that you include your calculations so that they understand your offer better.

5.    Include an earnest money deposit. Make a check for deposit payable to the company or the bank that you are making an offer to. Submit this along with your proposal letter and the loan preapproval. All these will make sure that you let the bank know you are a serious buyer and that the offer you are making is one they should consider.