Can you make a low-ball offer on a foreclosure property and win?
Can you offer 10% - 25% - even 50% below asking price on a bank-owned property and expect to have your offer accepted? Are lenders desperate enough to accept your pennies-on-the-dollar offer on their listing? Or are you wasting your time when you make a low-ball offer on a foreclosure property?
We hear this question all the time from buyers of foreclosure properties. Everyone wants a good deal and no one seems content to offer list price for a bank-owned property. "We might be leaving money on the table", they always say.
Home Encounter researched this issue to sets the record straight on the subject of low balloffers. Here's a summary of our findings based on foreclosure sales in Tampa Bay over the last 90 days:
39.9% The percentage of foreclosure sales that sold at or above list price. Of the properties that sold above list price, the average price premium was 5.5%.
34.9% The percentage of foreclosure sales that sold for no more than 10% below asking price.
49.7% The percentage of foreclosure sales that sold for no more than 20% below asking price.
6.2% The amount below list price for which the average foreclosure sold.
10.4% The number of sales that sold for less than 80% of the asking price.
In this volatile real estate market, one thing is for sure: you're not going to win any meaningful number of bids if you're offering more than 20% below list price on a foreclosure property. In fact, if you intend to have your contract accepted, your final offer is going to have to be within 6.2% of the asking price.
That's not a lot of room for a low-ball offer!