Strategy on foreclosure/multiple offer scenario

weedyacresJune 28, 2013

Severely outdated but structurally sound house, has asking price of $15K. Probably worth $30K in current condition, say $50-60K when fixed up.

Lots of investors circling, 4 offers in so far, all around asking price. Listing agent says bank (BOA) likely to collect offers for a few days, then go back to everyone for "best and final" and pick one.

Is there any merit in offering above asking initially now in hopes that the bank will take it instead of sending it back for best and final? Or do they always send it back when there are multiple offers?

Tips on putting together best and final to gauge what others might be offering given the circumstances, and what the bank is likely to accept?

Note that this is decidedly NOT a hot area of the country where multiple offers are common. The market is starting to breathe again, but it's a slow-and-steady midwestern small town, not a hot big-city coastal market.

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oklahomarose

Weedy: I can't offer advice on all aspects of your question, but I can to one particular part of it: I had my eye on a brick duplex in the part of town that I love, which was sorely dilapidated, wood rot everywhere, just a mess, but with its essential beauty quite visible to the naked eye. It was a short sale, and I waited months while a failed deal worked through the pipeline. And then at last it came back on the market. Oh, joy! I was told there were multiple offers (yadayada). I figured out what I was willing to pay and offered it--and got it. My offer was accepted by the seller on March 1, 2012. Being a short sale, there was a long row to hoe before all was said and done. I did not take possession until nine months later. If I were you I would make your best offer now--no higher or lower than what you are willing to ultimately pay--and then the chips will fall as they will. Good luck.

    Bookmark   June 28, 2013 at 1:36PM
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linda117117

The bank is going to accept the best and highest offer. Cash offers trump financing, then the highest of the cash offers. Since four offers are already in, chances are pretty good you will be in a best and final situation no matter what your offer is now. It doesn't hurt to go above asking now, they may take it,if they don't, you get another crack at it, doesnt mean you have to go higher, just stay the same if that is your best.

    Bookmark   June 28, 2013 at 8:01PM
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linda117117

By the way, where are you that there are houses for 15k????

    Bookmark   June 28, 2013 at 8:03PM
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sapphire6917

Linda117, I have no idea where Weedy is buying but I live in a mid-sized city and there are houses for 15k. I posted in another thread that my home was a little less than $17/sq. ft. and that's not unusual here.

    Bookmark   June 28, 2013 at 8:57PM
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kirkhall

(I'm a little envious of that ability to buy for so little, fix up and sell... If only!)

    Bookmark   June 28, 2013 at 9:28PM
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marti8a

That's a great price. Even the absolute dumps listed as is and work needed are $55K here.

    Bookmark   June 29, 2013 at 9:49PM
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kirkhall

Our absolute dumps, with freeway wall 20 feet from the back door are presently 339k...

    Bookmark   June 29, 2013 at 11:39PM
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weedyacres

Linda: small town in the midwest. Home prices for current listings are $12,999-550,000. Median ~$120K. 16 houses for sale The house in question isn't in the "ghetto," it's in the more "working class" part of town, where houses typically sell in the 40-80K range, but there are some larger ones in the low 100's too.

There are other advantages to living outside the big cities: no rush hour to speak of, free parking downtown (or anywhere)...

    Bookmark   June 30, 2013 at 8:58AM
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ncrealestateguy

Weedy,
When my clients face a multiple offer situation, I advise them to come in with the highest amount possible that ensures if you do not get the property, you are OK with it.
Remember, there is going to be a winner and a loser. At what price point do you not mind being the loser? Bid that amount.

    Bookmark   July 3, 2013 at 8:34AM
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