What should we offer on a house that is about to go into foreclosure?

We found a house listed for $119,000. When our realtor showed us the house there wasnt even a for sale sign up because the contract had ran out with the sellers realtor. They are not living in the house, it has been for sale 8-9 months.

We contacted the seller and they agreed to a short sale, since the house will be going into foreclosure anyway. We offered $70,000. Seller owes $110,000. Bank of America has the note. My dilemma is, if we try for the short sale, did we offer enough for the lender to consider taking, or should we let it go into foreclosure and try to buy it at auction?
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You have an agent -- put them to good use! Seriously, he/she's better equipped than anybody here to tell you how much the house is worth, what you ought to offer, how likely the bank is to accept your offer, what comps are selling for.

That said, IF the house is in decent shape (structurally sound, and all systems are in place), 70K's probably too low. It's upwards of 40% less than what the seller's asking, and 36% less than what the bank is owed. Buyers can get real deals in this market, but there's a fine line between a deal and a botched attempt at highway robbery. And if you're eligible for the first time home buyer tax credit, it's probably a botched attempted at highway robbery carried out with a rubber chicken and a spork instead of a gun.

If I were you, and this was a house I *really* wanted, I'd forget about trying to pick it up at auction, and get information about what comparable properties had sold for in the last two months, then depending on the information, maybe submit a higher bid.

In a place heavily hit by the mortgage meltdown and foreclosures crisis (NV, CA, FL), or plagued by urban decay you'd have better luck lowballing the bank or snapping it up on the courthouse steps, but SC's made it through relatively unscathed. If it goes to auction and the highest bid is insufficient, the bank will take it back, and re-list it in hopes of obtaining something close to what they're owed, or fair market value.

ETA: Deleted my last edit due to the fact that it needs work. You need to look at comps. They probably accounted for the fact that it needs work in the listing price (I thought $120K was nuts, even with the different cost of living).

Regardless of the shape, the bank's probably going to want something close to what it's owed. If your agent suggested 70K, you might be good, but I'd probably shoot for no less than 85 or 90.
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It has nothing to do with what the seller is asking for. The bank will send their appraiser and you can get away with 20-30% below what the appraiser reports back to the bank. As it is, it looks like the property is priced way to low. Get with a real estate agent for help. read my blog as well. Report Abuse

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Unfortunately on a short sale, you're at the banks mercy. You can sit on it for 1 week or 6 months. That amount is generally too low, especially since the feds just released the 4.4 billion in MHDC money to help in foreclosure status. I would of maybe offered $95,000. Your realtor should have told you not to offer to low. I tell my clients, if you want the house, you need to act like it.
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I am a CA Broker specializing in helping people buy and sell short sales. Generally speaking, you can get away with 20-30% below the lowest comp for that price range. Using zillow.com to get the comps of that area (very crude method), it looks like it is already listed way too low as the smaller homes on smaller lots are selling in the mid to high 100's. See if you can use 201 Berry Road as a comp.

Use a real estate agent that is very experienced in short sales as they get paid by the lender anyway to help you with this purchase.

I also wrote a blog on how to purchase short sales:
http://activerain.com/blogsview/1079781/...