4 of 4 Strategies for getting the best possible price accepted by the bank

  1. When making an offer on an REO property, take its’ condition at face value. Do not assume the worst, for example if the utilities are off do not base your offer assuming the plumbing,

Electrical, furnace, or central air unit is not working. Assume that it is working, because the bank assumes it is working.

 

  1. You also do not want to take the time or pay for a home inspection until after you have a signed contract. This way you have full control of the property, and do not have to worry about someone else taking the home out from underneath you.

    Your contract will have a clause that allows you to perform a detailed home inspection to verify the condition and everything is in working order. Should your inspector find any problems, with his / her report in hand as evidence, you can now re-negotiate your offer (while still in full control of the home) to have the bank either correct the problem to your satisfaction, or reduce the price so you can correct it for yourself. If you are unable to reach a reasonable solution to your satisfaction then you are out of the contract, and have the right to get your earnest money back for another home. Banks are typically reasonable when there is evidence to substantiate a repair from an inspector because; if they don’t take care of it for you, they will have to address the issue with the next buyer anyway. I say typically however if the Asset Manager feels you are already getting a good price they can be stubborn on giving any adjustment.

  2. Be prepared to negotiate back & forth – Most Asset Managers expect to negotiate back and forth. Their first counter is usually full price especially when the property is recently on the market. Therefore, it is advisable that you not make your very best offer initially. As long as you’re Realtor has verified that there are currently no other offers on the table. Also Asset Managers do occasionally get audited. So it makes sense that their records show an effort on their part to get their employer the best possible price. If they just accepted the first offer that came in all the time they would not have their job long.
  3. Should more than one offer come in on the same property at the same time, this then becomes a Multiple Offer situation, the asset manager will instruct the Realtor to go back to each offer and declare Highest & Best by a certain time. Usually within a 24 hour time period. This is where your financial ability can play a crucial role, in whether or not you get the deal.

    Sometimes a cash deal, or same as cash, as explained above will beat out a financing deal even when it is a little higher. Because of it being a sure thing. No financing contingency.

Test Your Knowledge:

 

It is always advisable that you get a home inspection prior to committing yourself to a contract so that you don’t get burned with a problem you cannot see on just a walk through.

 

T     F

September 12, 2017

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