How Much Should I Offer On A Foreclosure Listing?

One of the most common questions that I hear in the business of selling Chico foreclosures is, “How much should I offer?”

Buyers often think that if the property is a foreclosure (aka REO or bank-owned property) that the offer should automatically come in  low.  What they are really asking is, “How low of an offer can I get away with?”

It’s important to understand that the banks that own the foreclosures are like any “normal seller.”  Some sellers price their property really high in the beginning “just to see” if they can make a killing.  Other sellers price it low in order to create some competitive excitement and facilitate a quick sale.  Still others aim to price it very close to market value to ensure that it sells within a reasonable time period at the highest price possible.

Banks are no different, in that they have a pricing strategy.
  They typically get at least 2 different opinions of value from Chico Realtors, and many take the extra step of ordering an appraisal prior to settling on a list price.  Once they have determined fair market value, the asset manager then prices the property according to their company’s policy.  Some companies seem to take the fair market value and mark it up like 20%.  They refuse to seriously consider lower offers, and by the time it actually sells 6 months later, they sell it for less than they could have originally, because the market had continued to decline. Conversely, I work for one company that routinely prices their properties just under market value in order to procure a buyer within 7 days.

Don’t assume, just because the property is bank owned, that you should automatically write a low offer!!

As a buyer, you need to work with your chosen Realtor to carefully assess the property and consider the comps in order to determine what the fair market value might be.  The property may very well be under priced!  I see buyers miss out on fabulous deals by tossing out low offers with little insight as to the true value, or consideration of how much time the property has had on the market.  I can assure you, there are many savvy buyers and investors out there offering full price or more on properties.  Yes!  They are offering above asking price even in this market of declining values.  Why?  They did their homework, and are capable of recognizing a good deal when they see one.

Of course the flip side is that a bank will sometimes take a low offer.  I most commonly see lower offers being accepted after several low offers have come in, and it becomes apparent to the seller that they have missed the mark on their initial price.  Occasionally a clean, all cash offer will be accepted lower than asking price.  It’s often worth it to the seller to settle at a lower price if they don’t have to wait 30 days or more to see their money.  However, I think it’s an unfortunate misconception that many buyers with cash perceive their cash offer to be more appealing than it really is.

Cash in lieu of financing is not normally going to save a buyer a crazy amount of money.

Again, the best bet is to partner with a local Realtor who specializes in Chico foreclosures, and is astute at determining property value.  Do your homework and find a Realtor who is closing a lot of deals, and with whom you share a mutual respect and trust.  Pay close attention to the asking and selling prices of homes in the price range you want to purchase.

The more knowledgeable you become, and the more savvy your Realtor is, the better the odds that your offer will be competitive enough to win without overpaying for the property.

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Looking to Buy Bank Owned Chico CA Property? Search Here!

Updated: 04/11/2008

 

Want the inside scoop on foreclosure properties not yet listed? The following are scheduled for marketing within the next 30 days:

Chico (and surrounding areas) Foreclosure Properties Coming Soon!

6705 CO RD 20, Orland 

174 Artesia, Chico

852 Lindo Lane, Chico

475 Sacramento, Hamilton City

254 E 15th Street, Chico

2136 Rosedale, Oroville

762 1st Avenue, Chico

CHICO FORECLOSURES

1412 N CHERRY STREET Condos $114,900 2bed 1 bath, 864 sqft, built 1982 (Pending)

2200 NOTRE DAME BLVD Condos $119,900 2 bed 1 bath, 864 sqft, built 1981

269 W Rio Bonito, Biggs SFD $138,000 3 bed, 1.5 bath, 1222 sqft, built 1970

2197 FAIR ST SFD $139,900 1 bed 1 bath, 676 sqft built 1935

1271 E 9TH STREET SFD $160,500 2 bed 1 bath, 1296 sqft, built 1943

2159 SHOSHONEE AVE SFD $174,500 3 bed 2 bath, 1336 sqft, built 1988

2752 KEITH HOPKINS PL SFD, $179,900 3 bed 2 bath, 1221 sqft, built 1997

1527 B Street, Chico SFD $179,900 3 bed 2 bath, 1108 sqft, built 1989 

569 WHITE AVE SFD $194,000 3 bed 1 bath, 989 sqft, built 1959

2099 HARTFORD DR SFD $199,900 3 bed 2 bath, 1382 sqft, built 2005

87 KEY WEST LOOP SFD $219,000 3 bed 2 bath, 1126 sqft, built 2006 (Pending)

709 POMONA AVE Duplex ($219,900)  2 bed 1 bath, 1436 sqft, built 1948

8 SUN CIRCLE CT SFD $219,900 3 bed 2 bath, 1160 sqft, built 1986

5259 CHURCH ST (Richvale) SFD $224,900 3 bed 2 bath, 1456 sqft, built 1978

2701 REVERE LN SFD $225,000 4 bed 2.5 bath, 1516 sqft, built 1994 (Pending)

1276 CALLA LN SFD $227,424 4 bed 1.5 bath, 1746 sqft, built 1963 (Pending)

2631 SAN JOSE ST SFD $228,900 4 bed 3 bath, 2135 sqft, built 1960

1081 REY CIR SFD $232,900 4 bed 1.75 bath, 1414 sqft, built 1972 (Pending)

15 GLENSHIRE LN SFD $235,900 4 bed, 1.5 bath, 1305 sqft, built in 1987

747 WATERFORD DR SFD $237,450 3 bed 2 bath, 1374 sqft, built 1980

23 GLENSHIRE LN SFD $239,000 4bed 1.5 bath, 1305 sqft, built 1987 (Pending)

1482 DAYTON RD SFD 2 bed 1 bath, 1001 sqft, built 1990 $249,500

713 WAYNE LN SFD $265,500 4 bed 2 bath, 1525 sqft, built 1956

4330 KEITH LN SFD $269,000 3 bed 1.5 bath, 1392 sqft, built 1976 (Pending)

2718 CEANOTHUS AVE $279,900 3 bed 3 bath, 2060 sqft, built 2006

100 BENSON TERR SFD $279,900 3 be, 2 1/2 bath, 1967 sqft, built 2004

446 W 10TH STREET SFD $284,900 3 bed 1.5 bath, 1870 sqft, built 1910

1260 RAVENSHOE WAY SFD $287,000 4 bed 2.5 bath, 1532 sqft, built 1997 (Pending)

2 WINDMILL CT SFD $289,000 3 bed 2 bath, 1573 sqft, built 1980 (Pending)

2631 SAN JOSE ST SFD $289,900 4 bed 3 bath, 2135 sqft, built 1960

25 BUNKER CT SFD $299,900 3 bed 2 bath, 1801 sqft, built 2003 (Pending)

13200 HAMILTON NORD SFD $325,000 3 bed 2 bath, 1888 sqft, built 1976

1134 11TH AVENUE SFD $335,300 3 bed 2 bath, 1853 sqft, built in 2004

305 MESA VERDE COURT SFD $347,624 4 bed 3 bath, 2325 sqft, built 2005 (Pending)

832 JACOBS CT SFD $359,900 3 bed 2 bath, 1760 sqft, built 1999

3006 TOP HAND CT SFD $379,900 3 bed 2.5 bath, 2336 sqft, built 1980

352 MESA VERDE COURT SFD $435,000 4 bed 3 bath, 2460 sqft, built 2005

2721 ESCALLONIA WY SFD $439,000 4 bed 3 bath, 2435 sqft, built 2001

454 BROOKSIDE DRIVE SFD $498,000 3 bed 3 bath, 2811 sqft, built 1993

3517 SHADOWTREE LN SFD $549,000 3 bed 3 bath, 3240 sqft, built 2004

10696 PLAYER LN SFD $649,900 3 bed 3 bath, 3342 sqft, built 2005 (Pending)

2766 ALAMO AVE SFD $695,000 4 bed 3 bath, 3600 sqft, built 1996

LOS MOLINOS FORECLOSURES

24890 KELLIE WAY SFD $199,900 3 bed 2 bath, 1252 sqft, built 1968

MAGALIA FORECLOSURES

13996 JARVIS CIR MFD $89,000 3 bed 2 bath, 1536 sqft, built 1976

13721 ENDICOT CIR MFD $129,500 2 beds 2 baths, 1616 sqft, built 1979

13980 CASCADE DR SFD $149,900 3 bed 1.75 bath, 1080 sqft, built 1980

14549 CARNEGIE RD SFD $159,000 3 beds 2 baths, 1486 sqft, built 1992

13695 ANDOVER DR SFD $168,900 3 bed 1 bath, 1564 sqft, built 1982

14569 ASHEVILLE DR SFD $169,900 2 bed 2.25 bath, 1738 sqft, built 1981 (Pending)

6560 HURON CT SFD $209,900 2 bed 2 bath, 1260 sqft, built 1980

14560 CARNEGIE RD SFD $212,900 2 bed 2 bath, 1751 sqft, built 1979

15220 SKYWAY SFD $215,000 3 bed 2 bath, 1696 sqft, built 1979

14569 ASHEVILLE DR SFD $219,900 2 bed 2.25 bath, 1738 sqft, built 1981

14658 BRIDGEPORT CIR SFD $261,250 3 bed 2 bath, 1903 sqft, built 2005

ORLAND FORECLOSURES

801 PECAN ST SFD $145,000, 3 bed 1.5 bath, 1080 sqft, built 1986

1311 FAIRVIEW ST SFD $135,000 3 bed 1 bath, 1000 sqft, built 1993

621 COLUSA ST SFD $136,900 3 bed 1 bath, 1015 sqft, built 1940

802 DATE ST SFD $149,900 3 bed 2 bath, 1080 sqft, 1988

803 PECAN CIR SFD $152,900 3 bed 2 bath, 1080 sqft, built 1986

1309 FAIRVIEW ST SFD $169,000 3 bed 1.5 bath, 1080 sqft, built 1993

802 DATE ST SFD $169,900 3 bed 2 bath, 1080 sqft, built 1988

611 WOODWARD AVE SFD $190,000 3 bed 2 bath, 1402 sqft, built 1948 (Pending)

778 JACQUELYN DRIVE SFD $249,900 3 bed 2.5 bath, 1773 sqft, built 2006

120 THIRD STREET SFD $259,000 3 bed 2 bath, 2063 sqft, built 2005

6202 CO RD 15 SFD $299,900 3 bed 2.5 bath, 2300 sqft, built 1977 (Pending)

6705 CO RD 20 $354,900 4 bed 3 bath, 2114 sqft, built 2005

OROVILLE FORECLOSURES

3320 Columbia Ave SFD $68,432 3 bed 1 bath 680 sqft, built 1949

2364 A STREET SFD $69,900 2 bed 1 bath, 864 sqft, built 1935 (Pending)

881 POMONA Ave SFD $78,900 2 bed 1 bath, 988 sqft, built 1921 (Pending)

4935 LINCOLN BLVD SFD $79,900 3 bed 2 bath, 1152 sqft, built 1981

2765 ORO BANGOR HWY SFD $84,900 3bed, 1bath, 1008 sqft, built in 1987 (Pending)

292 APACHE CIR SFD $91,080 2 bed 2 bath, 1440 sqft, built 1976

29 ROSITA WAY SFD $98,000 3 bed 1 bath, 960 sqft, built 1963 (Pending)

2151 OROVILLE BANGOR Duplex! $99,900 built 1954

1080 TEHAMA AVE SFD $104,900 1 bed 1 bath, 912 sqft, built 1949

118 NELSON AVE SFD $109,990 3 bed 2 bath, 1552 sqft, built1965

2126 GRAY ST SFD $120,900 3 bed 2 bath, 1080 sqft, built 1992

3451 ORO BANGOR HWY SFD $134,900 3 bed 1 bath, 1266 sqft, built 1950

1020 BUTTE AVE SFD $139,900 2 bed 1 bath, 1030 sqft, built 1959

1604 SWEEM ST SFD $149,000 4 bed 2 bath, 1597 sqft, built 1960

1687 LETA LN SFD $152,600 2 bed 2 bath, 1038 sqft, built 1978

220 CANYON DR SFD $149,900 4 bed 2 bath, 1894 sqft, built 1954

18 WESTWOOD WAY SFD $158,900 3 bed 2 bath, 1152 Sqft, built 1979

853 HARLAN AVE SFD $159,900 3 bed 1 bath, 1088 sqft, built 1951

3081 ORANGE AVE SFD $161,000 3 bed 2 bath, 1443 sqft, built in 1954

1445 7TH AVENUE SFD $173,000 2 bed 1 bath, 1228 sqft, built 1925

11 GLEN CIR SFD $178,900 3 bed 2 bath, 1936 sqft, built 1963

37 SELF LN SFD $184,000 2 bed 1 bath, 1240 sqft, built 1982 (Pending)

21 LA CRESENTA DR $189,900 3 bed 2 bath, 1338 sqft, built 1951

3131 TRES VIAS RD $199,900 3 bed 2 bath, 1787 sqft, built 1968

30 RIDGE LINE CT SFD $204,900 2 bed 2 bath, 1381 sqft, built 1990

105 ANTLER DRIVE $221,900 4 bed 2 bath, 1687 sqft, built 2005 (Pending)

17 LA FORET DR SFD $259,900 3bed 3 bath, 2344 sqft, built 1983

3615 HILDALE AVE SFD $277,200 3 bed 2 bath, 1778 sqft, built 1961

2680 HWY 70 SFD $322,900 2 bed 2 bath, 1836 sqft, built 1981

PARADISE FORECLOSURES

6221 CLARK RD SFD $99,900 1 bed 1bath, 1182 sqft, built 1955 (Pending)

1835 DRENDEL CIR SFD $114,900 4 bed 1 bath (Pending)

6338 DIAMOND AVE SFD $129,900 2 bed 1 bath, 1147 sqft, built 1949 (Pending)

1537 SYLVAN WAY SFD $130,000 2 bed 1 bath, 1056 sqft, built 1954 (Pending)

5371 SAWMILL RD SFD $139,000 2bed 1 bath, 1014 sqft, built 1950 (Pending)

5757 HOLLY LN SFD $139,900 1bed 1 bath + den, 1080 sqft, built 1948

5571 KEITH LN SFD $135,900 2 bed 1 bath, 904 sqft, built 1940

463 VALLEY VIEW DR SFD $138,000 2 bed 2 bath, 1020 sqft, built 1947 (Pending)

1115 NUNNELEY SFD $140,500 3 bed 2 bath, 1626 sqft, built 1950

1462 ELLIOTT RD SFD $158,900 2 bed 1 bath, 1064 sqft, built 1954 (Pending)

1481 MAGGIES LN SFD $159,900 2 bed 1.5 bath, 996 sqft, built 1980

6893 LUNAR LN SFD $164,900 2 bed 1.5 bath, 988 sqft, built 1970

6104 OLIVER RD SFD $169,900 2 bed 1 bath, 1054 sqft, built 1950 (Pending)

1363 PEARSON RD SFD $177,900 3 bed 1 bath, 1056 sqft, built 1988 (Pending)

5575 SIERRA PARK DR SFD $190,000 3 bed 2 bath, 1420 sqft, built 1948

5811 PERRY MASON LN SFD $195,000 2 bed 1.5 bath, 1799 sqft, built 1956

490 WILLS LN SFD $199,900 3 bed 2 bath, 1505 sqft, built 1976 (Pending)

616 CIRCLEWOOD DR SFD $209,000 2 bed 2 bath, 1520 sqft, built 1979 (Pending)

481 TIGER TAIL LN SFD $210,000 2 bed 1 bath, 1428 sqft, built 1925

1658 JARAMILLO LN SFD $219,000 2 bed 2 bath, 1530 sqft, built 2006

5892 COPELAND RD SFD $225,000 3bed 2 bath, 1715 sqft, built 1966

1658 JARAMILLO SFD $239,000 2 bed 2 bath, 1530 sqft, built 2006

1752 WHITAKER RD SFD $239,900 3 bed 1.5 bath, 1435 sqft, built 1962 (Pending)

1460 SUMMER LN SFD $258,500 3 bed 2 bath, 1731 sqft, built 1968

1635 ALEXIS LN SFD $262,000 6bed 3 bath, 2977 sqft, built 1981

6165 SAWMILL RD SFD $269,900 4 bed 2 1/2 bath, 1936 sqft, built 1979

1246 ELLIOTT RD SFD $345,000 4 bed 3 bath, 2236 sqft, built 1960

3366 HAMLIN CANYON CT SFD $ 384,900 4 bed 3 bath, 2548 sqft built 1992 (Pending)

3591 SUNVIEW RD SFD $389,900 3 bed 2.5 bath, 2107 sqft, built 2002

WILLOWS FORECLOSURES

319 N SHASTA STREET SFD $85,000 2 bed 1 bath, 703 sqft, built 1950 (Pending)

1052 ELM ST SFD $121,900 2 bed 1 bath, 958 sqft, built 1970

651 GLENNWOOD LN SFD $125,000 3 bed 2 bath, 1354 sqft, built 1979 (Pending)

430 W ASH ST SFD $145,000 3 bed 1 bath, 1535 sqft, built 1910

833 W SYCAMORE ST SFD $149,500 3 bed 1 bath, 1100 sqft, built 1915

695 E WOOD ST SFD $145,000 3 bed 2 bath, 1200 sqft, built 1940 (Pending)

1271 E 9TH STREET SFD $168,500 2 bed 1 bath, 1296 sqft, built in 1943

612 GLENNWOOD LN SFD $174,900 3 bed 2 bath, 1100 sqft, built 1972

Subscribe here: Chico CA Real Estate Blog to receive daily foreclosure updates!

Do you need more information on any of these properties?  Call your local Chico REO expert, Sandi Bauman.  530-864-5407. 

MUST HAVE information:

Foreclosures: What you should know BEFORE you make an offer, Part 1

Foreclosures: What you should know BEFORE you make an offer, Part 2

Foreclosures: What you should know BEFORE you make an offer, Part 3

Chico, California Foreclosures and West Nile Virus


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Foreclosures: What you should know BEFORE you make an offer, Part 3

This is part 3 in a series of helpful hints to purchasing foreclosures in Chico, CA.

Did you miss parts 1 and 2? Read here!

Foreclosures: What you should know BEFORE you make an offer, Part 1

Foreclosures: What you should know BEFORE you make an offer, Part 2

Chico CA real estate buyers and investors LOVE foreclosures.

The problem is, there aren’t that many to go around! Many areas of California have experienced a high influx of foreclosures thanks to the recent mortgage meltdown. Chico, CA however has fared a little better in terms of relative numbers of repossessions.

Chico CA real estate foreclosuresChico CA buyers are competing to snatch up the bank-owned (REO) property when it DOES come along. It’s important to remember, however, that purchasing an REO property can be quite a bit different than a traditional Chico CA real estate purchase.

Before offering on a Chico, CA REO property, you should know:

1. It’s important to have a preapproval letter from your lender. Most of the banks I’ve dealt with require that the preapproval be submitted with your initial purchase offer. Without it, they won’t waste their time reviewing your paperwork. While this makes good sense anytime you are offering on a property, it’s critical for an REO listing.

2. The bank also wants to prequalify you themselves.

They want to see the letter from your preferred lender, but they won’t necessarily trust it! Oftentimes, you will be required to fill out their credit application just so they can verify that you do indeed qualify for the loan amount, or are otherwise financially stable. Although they would be happy to process your loan, you are still pursue a loan through the lender of your choice.

3. The bank is picky when it comes to title companies.

Typically, a buyer has some say about which title company they prefer, and even which officer they would like to work with. The bank really doesn’t care if your friend Sue is the best title officer in the county and her office is only 2 blocks from your new house. Most of the time, they already have a title company and officer designated, and the point is non-negotiable. The best part? The title company is usually out of the area, and unfamiliar with local practices.

Like what you’re reading?

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Still want to be part of the foreclosure frenzy taking place in Chico CA real estate? Contact me, and I will work to find you the perfect Chico REO property for your needs.

Sandi Bauman, Chico CA Realtor: 530-864-5407.

Related reads:

Short escrow? Get your ducks in a row BEFORE you make an offer.

What is the Difference between Prequalification and Preapproval?

Why Should I Get Preapproved for a Chico, CA Home?

Looking to buy or sell Chico CA Real Estate? Need a Top Producing Chico CA Realtor? Call Sandi Bauman 530-864-5407 or email [email protected] Specializing in REO, residential, relocation, investment & ag property.

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Sandi Bauman (Chico Homes): Real Estate Agent in Chico, Butte County, California
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