We're preparing to move to Frisco. I have several homes that I would like to see and noticed that several are foreclosed upon. I'd like some thoughts on anyone who has purchased a foreclosed home. Do realtors get extra money for helping with buying a foreclosed upon home? What % below asking price do you offer.
BTW- I already have a realtor.
If you already have a realtor, why not ask him or her? Is it a friend or family member and you are afraid of offending?
With a foreclosure, just remember there is no seller disclosure so what you see is what you get. Realtors usually get less money for a foreclosure, not more; but I'm curious as to why you would ask this question! Take care!
Realtors get their commission from the listing agent on a foreclosed home. We actually make less on it b/c the bank cuts the commission a lot of times from 3% to 2-2.5%. You have probably signed a realtor/buyer rep agreement that might say 3%. I don't know many realtors who actually charge you the extra if they don't make 3%. That would be pretty greedy if you ask me!
Now if you are looking at HUD homes that is a different story. HUD home are FHA loans gone bad and their commission comes out of your bid price. You bid at auction instead of putting in an offer. Only certain broker can bid on HUD homes. Realtors have the option to do 0-5%. The higher they go the lower your bid looks. I would not pay a realtor over 3% commission on the deal.
Realtors make their money off of the seller side. Don't ever feel like you have to give anyone extra money. If you feel like you need to do extra give a small gift card or something as a thank you but don't ever feel obligated.
Hope this helps
L. Oldham
eHomePro
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my husband and i bought a foreclosure in plano last year. from what i remember our realtor saying, they actually get less. we actually tried to get several before the one we ended up with. we just made too low of offers. you never know what the bank is willing to accept and how many other offers are on the table. just take into consideration how much work you are going to have to put into the home. we ended up getting ours for about $25K less than asking price, but it had been on the market for a while.
good luck!!! and sometimes it takes a while to hear back from the selling party because they are waiting for more offers.
We bought a really great condition foreclosed home and the bank had it on the market for over a year and went down over $10,000 on the price. We got it for $269,000 and they listed it for $282,000 when we put in the offer. It had been in the $380,000's when they first listed it two years before.
It all depends how willing they are to get it off the market and how long it's been on the market. I highly recommend buying the home warranty service since it is a foreclosure. We have already used our twice this year for both of our air conditioning units.
On a HUD home the Realtor can make anywhere from 0 - 5% of the homes price. It really depends on the contract and the purchase price, etc. A foreclosed home can be wrought with problems or it can be just fine. What I tell clients quite often is to realize that if the previous owners did not have the money for the mortgage, they more than likely did not have money for any repairs or upkeep that may be required. If it is a relatively newer home there may be less problems. A thorough inspection is very important. There isn't a set percentage below the asking price. The banks have the ultimate approval, and if you want the home you will take that into consideration. Many banks are already taking a bath on the home so they are not willing to negotiate much lower.
We bought a foreclosed home and the bank was not willing to go any lower than the listed price. It was listed at what was owed to them and they weren't willing to take more of a loss. It had been vacant for 9 months and they didn't care, the price was firm. The house wasn't in great condition (crayon all over the walls, needed new carpet & paint) but we knew that going in. After we moved in I realized that they had taken the oven racks. That really ticked me off. Those things are $50 a piece and you have to order them. It was almost 2 weeks before I could cook.
We have bought 2 foreclosures. The first was a HUD a little more paperwork, we payed almost full price for it, but it was during the HOT market times in FL, we sold it a year later for $25000 more than what we payed, but we put a lot of work into flooring and paint mainly. Our current home is also foreclosure. At first they wouldn't come down anymore than the asking price, but after much persistence, they finally made the deal with us about $20000 less than asking price and the home was in real good condition. I would say the longer on the market the more willing to come down on price. Oh and get a home inspection For Sure!
Good luck.
Debbie - I know that I like to get as much information as possible about things from impartial sources before I talk to someone who is trying to make money off of me, such as a realtor. Maybe that's why she's asking?!?
