My advice to clients has always been that by giving low offers for already bargain basment prices, you are only letting some one else get the bargain. You dont know how many others are making offers and you dont know what they are offering. Trying to save a few thousand dollars will be what stands between you getting the home you want and some one else getting it.
I absolutely have no problem making low offers on behalf of my clients and instead of refusing to make low offers, the approach I have taken is that I have the patience to let my clients find it out for themselves. After making several such offers and getting rejections, or no response at all from the banks, they eventually come to terms with it. I'll give you right the advice, but its up to you take my advice or not.
- If you bid as "Owner/Occupant" you are given priority over other types of bidders such as Investors. However, this comes at a cost of you having to live at the property for a period of 1 year. Failing to live up to these obligations can lead to steep fines.
- There is a List Price and a AS IS Value. List Price is less than or equal to the AS IS Value.
- If you bid over the AS IS Value, you will have to pay the difference in cash.
- Closing costs you request are deducted from the offer price. If you are asking for closing costs, be sure to add it to the offer price, so it can become part of the offer to be financed.
- Due to the lower priced properties, your agent is entitled to a 5% commission, this also is deducted from the offer price.
- What is important to HUD is the final offer price after all the deductions.
- If the property has a Repair Escrow amount and you are financing the purchase, you have to find a lender willing to handle the Repair Escrow. Not all lenders do so.
- All offers require signatures and changes to be in Blue Ink, so faxing back and forth will not work and meeting face to face is the quickest approach.