3 tips on buying a foreclosed home

Meet the latest desperate home seller: the bank. According to RealtyTrac, lenders repossessed 197,800 homes in the first four months of 2008 vs. 90,800 in that period last year.



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I've never had a lot of luck with REO's in the past, but others have made a fortune in them. Most of the time, I'd put down a low (but reasonable) offer, and the bank would only counter $500-$1000 lower (if at all). I'm dealing with one now, actually, and they are being a little stiff, too. The house has been vacant since last November, and they originally listed it for $15,000 over FMV. They dropped it down $20,000 a few months ago and just recently dropped it another $20,000. It's still too high, IMHO, since it needs some work. I submitted an offer $30,000 less than their list price (along with some other incentives), and got a "refuse to even negotiate with that offer" response back. I'm sure in a couple of months they'll drop it another $20-30k - right abut my offer price. We'll see.

And why is it that you insist on this property?
For sure there are many more available in the area, correct?

It would be our personal residence.

Yes. Although, unlike most of the country, central Texas has been for the most part immune to the RE slump. Deals exist, but the competition here is still very high (mainly out-of-state RE investors, looking for the next great place to park their money). Also, this particular home, while its in a neighborhood we like, doesn't have a lot of the things we want in a personal residence.

Bump.