What can we do to increase our chances of having a bank accept our offer on their home?

Q: We have made multiple offers on bank owned homes in our area without success. What can we do to finally get an offer accepted?

Bank owned properties are a hot right now in the Central Florida area. Investors, first time homebuyers and buyers looking for good deals are competing against each other presenting offers on available properties as soon as they hit the market. While there are no guarantees, a buyer and their agent can take steps to increase their chances of having their offer accepted.

• Are you offering less than asking price? The time for testing the market or making low offers to sellers, especially sellers who are banks is gone. It is a seller’s market for banks and their listing inventory. Ask your agent to provide you with research for the area. Are bank owned property selling above list price? If so then offering less will continue to result in rejection.
• Make them an offer that is hard to refuse. Will your purchase be subject to financing? Strengthen your position by getting approved. Make sure the financing approval letter provided to you by your lender is strongly worded leaving no doubt that financing is not an issue. Being approved should allow you to shorten the contract time period from offer to closing. Instead of 30 days can you now close in 15? The cleaner the offer in terms of contingencies and time frames increases the chance your offer has of being accepted.
• Look for older inventory. There are situations when even bank owned property do not sell immediately upon hitting the market. Perhaps they were priced to high at the onset and the bank refused to negotiate early on. These same listings may now have received price reductions that make them good deals but since they are no longer fresh, they are ignored by buyers and their agents. Have your agent pull bank owned property that have spent a few months on the market and look for those with price reductions.

These suggestions may help you purchase a bank owned property. Of course there is more that just bank owned property on the market right now. You would be wise not to dismiss the regular home owner trying to sell their home. Short sales and motivated sellers/builders are offering some very good deals as well in this market.

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How much should I offer on the home?

Q: I found a home I really like. How much should I offer on the home?

Congratulations on finding a home! I am assuming from your question that you are not willing to offer the listing price being asked for by the seller and are trying instead to decide on what you believe to be a fair price to offer less than asking price.

Determing how much to offer

How much you offer is strictly a personal decision and should be based on your opinion of the home’s value. Your real estate agent can provide you with comparable sales listed in the MLS for you to review. Your county property appraiser may have a website that will allow you to look at recent sales in the area. You can also ask your agent how long the home has been on the market and have there been any price reductions or enhancements during this time. You should also be asking yourself how the home compares in price to other homes you have recently visited. What are the features of this home that you like? Can you find those same features in a home with a lower asking price?

What is next?

Once you are comfortable with how much to offer it will now be up to the seller to decide if the offer is acceptable. While the price may seem fair to you, usually there is no way of knowing what price the seller would be willing to accept, if any, less than what they have publically indicated by their list price. The seller has the option of accepting your offer, ignoring it or countering for a higher price or for better terms.

End the end you should decide what you are willing to pay for and offer for a home. When you have found a home that appears perfect for you, the answer of how much to offer will be clearer.


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Buying a home subject to financing

Most home buyers need to obtain financing in order to buy their home. When making an offer to purchase a home, the Florida Association of Realtors (FAR) Sale and Purchase Contract has a clause that covers this contingency for the buyer and sellers protection.

This clause allows the buyer to select that they will be applying for new financing. The choices of financing offered are; conventional, FHA and VA financing. The percent of the purchase price that the buyer will be financing is also listed on the contract.

When entering into a contract with the seller, the buyer is usually agreeing to apply for financing shortly after receiving an accepted offer. This application process should be done as soon as possible following the acceptance of their offer. The FAR contract allows for 5 days should the buyer not select a different time period.

Unless changed by the buyer or seller, the FAR contract then allows the buyer 30 days after the effective date or 5 days prior to closing, whichever occurs first, to obtain a written financial commitment or approval letter. If the buyer is unable to obtain written commitment, then the buyer should let the seller know in writing during this same period.

The buyer’s financing contingency requires the buyer to keep the parties involved in the transaction, real estate brokers and sellers, updated about the application process and any issues that may arise as they work towards receiving their financial commitment. If the buyer has used diligence and is unable to receive a commitment letter in the allowable time period, then the buyer can notify the seller in writing and the contract may be cancelled with the buyer receiving any deposits back that they have made once both parties have agreed to cancel the contract.

Purchase contracts are legally binding documents and should never be entered into lightly. The financing contingency portion of the contract is one of many legally binding contingencies. We have the experience and knowledge to successfully write offers for you as a buyer but would always encourage you to seek legal advice from and attorney if you are not totally comfortable.


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- Greg Staker - Watson Realty Corp. - 407-304-0255