After months of house searching and not finding much I finally found the perfect house. It's a bank owned home and the carpet and walls are super gross but other than that I think we could turn it into an amazing home. The comps go for about $225k but the bank has it listed at $184,999k and we need about $4k in closing costs. I'm really debating on whether I should come in lower--$186k (so $182k + $4k) to compensate for additional repairs that may not be seen, or if I should try to go in higher--$191k (so $187k + $4k) for a better chance of getting it
Any of you ladies have experience in getting a bank owned home and have advice on where it's best to have the offer lie?
Re: NBR: Buying a bank owned house
We just closed on ours in October. Not sure how your market is there, but ours also was worth $250,000+ but they had it listed for 170,000. In our case they listed it low to get attention. We were actually in a bidding war and had to come in at our absolute best. I think we initially offered 171,000 minus closing costs. With the bidding war we went in a little higher. I think there was 3-4 other offers, but they countered off ours at $175,000 minus closing costs. We agreed.
Dealing with the bank was a long, annoying, frustrating process. I think the fact we had two inept realtors didn't help. We were under contract with the house from march to October of last year. I've heard they can go even longer too. Sometime through the process we had to adjust what we were getting the house for according to the bank. They raised the price of the house to 180,000 minus closing. Our thinking was that even at this price, we're still getting the house for a lot cheaper than it's worth. The previous owner still owed over $220,000 on the house so the bank was just trying to not lose as much.
As far as offering lower because of repairs, the bank doesn't care about that. They're more concerned about the amount they're going to lose. Our house was disgusting. The previous owners never did any maintenance on it. Never changed the filters so the entire vent system was black and nasty, never trained their dogs so the carpets were nasty, never cleaned in general. We had to replace the carpet and literally paint every single room in the house. We had to get all new appliances because they took the ones that worked, and left the ones that didn't. They stole the garage door opener, so we had to get a new one. Had to get a new disposal because the old one was cracked. New sump pump, new water pressure meter. The list goes on.
In the end, we believe this is the perfect house for us, our dream house, and the pain and effort is so worth it, because we got our house for a lot less than anyone else in the neighborhood.
Update--after speaking to my lender I realized it's only a $26 monthly difference so I think I'm going to go all in at $191 to increase my chances.
I would still love to hear anyone elses experience with buying bank owned homes!
Be prepared for the bank to come back and say "We've had multiple offers so submit your highest and best". This is what happened to me and XH (and others I know). Our first offer was $10k under list price and it was in the top end of our budget. When the bank wanted our "highest and best" we just resubmitted our original offer and hoped for the best. The bank countered at $7500 under list price and we accepted. It kind of makes me sick to think if we had increased our offer and then the bank countered even higher and we took that.
We had no issues with delayed closings or anything. I agree with pp's that the banks don't care about potiental repairs needed. They just want their investmetn back.
My dint was our realtor so we got all of the closing costs back. It was very
Easy for us.
Now we are finally doing repairs and remodeling a few years into
It. I wish we could have been able to get a cash loan for that.