A Deal From The Bank
After a foreclosure and an auction, Susan is thinking of beating up the bank on the price of a house that she wants.
QUESTION: Susan has been eyeing a particular home for a while. It went to foreclosure and then auction, and did not sell. In this situation, can she negotiate with the bank for an even better price? Dave thinks so, but there are some conditions.
ANSWER: Sure, you can negotiate. I don’t know what they would take, but it depends on the deal and the bank. If the bank is sitting neck-deep in property and the feds are leaning on them to clean out some of their hard assets, then they will be very motivated. Other times the big banks are so bureaucratic and you’re dealing with someone who has a bunch of files on their desk and they just really don’t care.
You just can’t get too married to the deal. I always want to help them find out how little they will take. I’m not afraid to insult a banker. It’s a person doing a job; they don’t own anything. The bank owns it, and their job is to make as much as they can. So they will assess the market and see what they can get.
If the house was valued at $600,000 and was foreclosed at $375,000, then call the attorney in charge of it and ask them who to contact in the company that did the foreclosure. See if you can find someone to whom you can make an offer. If you can, there’s no rule of thumb there. I’ll certainly offer them less than $375,000. You might offer them $300,000 or less to see what they do. The worst they can do is say no and then maybe they’ll counter offer.