Author Topic: Beautiful house, bank wants too much for it, what to do?  (Read 4800 times)

panda

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Beautiful house, bank wants too much for it, what to do?
« on: November 17, 2014, 07:42:29 AM »
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« Last Edit: December 15, 2017, 10:14:11 AM by panda »

KBecks2

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Re: Beautiful house, bank wants too much for it, what to do?
« Reply #1 on: November 17, 2014, 11:02:39 AM »
What are you willing to pay for it?  (Is this for your primary residence?)  Why not make an offer that is in line or near what you think it is worth and see what happens? 

GizmoTX

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Re: Beautiful house, bank wants too much for it, what to do?
« Reply #2 on: November 17, 2014, 11:18:29 AM »
Making a low ball offer is the best way to see what the bank will accept, with the contract contingent upon an inspection that you then pay for. You want assurance that you can get out of the contract if the total you will have to fix exceed a specified dollar amount for the going rate to repair or replace. A realtor is not the seller.

waltworks

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Re: Beautiful house, bank wants too much for it, what to do?
« Reply #3 on: November 17, 2014, 12:34:42 PM »
As others have said, you need to make an offer of some kind so that you can figure out if the bank is going to negotiate (IMO unlikely but you never know) or not. In my (limited) experience with short sales/foreclosures, typically there is really not much wiggle room - the banks are often willing (or forced to by the investors who own the note) to stick to their guns, sometimes for years. If you think the neighborhood is up and coming, the bank (or their agents) probably do too.

That said, writing an offer takes 10 minutes. Give it a shot and see what happens. And sit down before you enter any negotiations and decide what you actually are willing to pay for the place. Don't just start throwing numbers back and forth without a plan.

-W

johnhenry

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Re: Beautiful house, bank wants too much for it, what to do?
« Reply #4 on: November 26, 2014, 01:33:59 PM »
As usual, I agree with Walt.

I don't have much to add except that: looking at this from the bank's point of view may give you an idea of what kind of offer to make.

What do you think the title of the thread would have been if they wrote it?:  "Beautiful house, a shame we had to foreclose.  One guy who saw it thinks we should give it away to him."

Gone Fishing

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Re: Beautiful house, bank wants too much for it, what to do?
« Reply #5 on: November 26, 2014, 02:10:38 PM »
Making a lowball offer is fine if you have nothing to lose by not getting the property but it sounds like you think this may be your place.  There is nothing wrong with paying a fair price for what you want. We often get jealous of others' "deals" and want one for ourself, sometimes to our detriment.  Don't know how competitive the market is (If people are paying over asking, ignore the following), but I would suggest offering 5-10% less than you think it is worth before the needed repairs (assuming you are willing to pay what you think it is worth) to give yourself some negotiating room, then work up to your number if need be to get a contract on it.   If they are really eager and take your first offer, you will be 5-10% ahead. 

I paid full asking price for my current home.  The owner priced it for a quick sale and was firm on his price.  It was kind of strange not negotiating the price down a bit on such a large purchase, made me feel like I was paying too much, but it truly was a fair price. 
« Last Edit: November 26, 2014, 02:13:00 PM by So Close »

Dicey

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Re: Beautiful house, bank wants too much for it, what to do?
« Reply #6 on: November 26, 2014, 02:57:10 PM »
Have you checked Zillow and/or public records for the house's price history? The bank probably used similar data to set the price. Then I'd take Walt's advice.

My sister bought a foreclosure. They looked for seven years for the right combination of price/house/land. Their first offer was rejected. The offer that was accepted fell through. They offered again and were rejected again. This went on for months. In the end, they got the house at close to what they wanted to pay, but it was almost a year-long process. Are you willing to fight it out with the bank for an extended period of time? There a lot of houses out there, make sure this one's worth the energy. If you're willing to fight and wait, it could pay off in the end. Whatever you do, keep looking! Something else might come along to make you forget all about this property.

Dicey

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Re: Beautiful house, bank wants too much for it, what to do?
« Reply #7 on: November 26, 2014, 10:02:45 PM »
Sounds like the right decision. Keep looking, keep saving. When you find the right house, it will sing to you, even if it's (temporarily) ugly.

BrettGoldsmith

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Re: Beautiful house, bank wants too much for it, what to do?
« Reply #8 on: November 27, 2014, 11:11:08 AM »
I'd find out when the banks last value was completed and when it is set to expire. Potentially if a new value was completed it would come back lower. I'd also be looking into completing a value dispute with the mortgage servicer. Providing comps, bids, supporting documents, or even an appraisal. Typically investors are looking for an offer within 90% of their value or they may be a minimum NET they are looking for.

deborah

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Re: Beautiful house, bank wants too much for it, what to do?
« Reply #9 on: November 27, 2014, 01:10:20 PM »
Thanks for the advice everyone and a quick update on the house. I went out to look at it again and was prepared to make a pretty reasonable offer on the house that would have been accompanied by a letter explaining how the number came about when I ran into the caretaker for the house that knew the history. They then proceeded to tell me about everything that was wrong with the house and in a nut shell, the foundation is shot and the basement has been flooded twice in the past three years with raw sewage from the mains. I was literally told by the caretaker that "Buying the house would be like playing Russian roulette."

The rest of the house is still quiet beautiful, but after hearing that I'm pretty much going to write it off as a money pit. My understanding is that while roofs can be replaced, bad foundations built on bad soil and terrain is something that can never truly be fixed.
I'd question the bank about whether this has happened. Where I live, real estate agents and vendors have a duty to disclose things like this. They don't necessarily, but they must when asked point blank. After all, the caretaker may be after the house too - probably not, but it is a possibility.

Fallenour

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Re: Beautiful house, bank wants too much for it, what to do?
« Reply #10 on: December 11, 2014, 05:56:54 PM »
Take my advice, pass on this property.

If the areas around it are going for less, and the property is missing appliances, theres no telling what else was taken.

The biggest concern I always share with properties missing appliances, is is it also missing its plumbing? That easily walks you into a hidden 10-20k cost off the top, and the house is already over what would be its FMV. (Fair market value.)

Additionally, houses lose value over time, they dont increase in value. Anyone who believes that is mistaken. What increases in value is the land itself. The house, and the materials it is built out of degrade over time, which is why you are able to amortize the decrease of the value over time, as well as make money by donating parts of it out if you want to "decomission" the house(s) you have as I call it.

Have an appraiser go out and assess the value of everything, and then find out how much the area of land goes for in that area for a comparible size.

Take that, and add the assessors total value of the house. Thats what the house is ACTUALLY worth at the moment FMV.

Then take that, and subtract all the costs of replacing the appliances, the roof, and all other repairs. Thats what its actual worth is in its current condition.

Obviously, you never pay what its "worth" because thats not profitable. Add a margin of profit that you want to make, and offer that. If they dont accept it, walk. run. Just get away from it.