I have placed 2 offers (and lost)… and came to following conclusion.
Important thing is that you like the property first.
* There is no negotiation – You put in your best & final offer the first time
* Do basic stuff – pre-approval letter or cash offers, no strings attached.
* Forget your own buyer’s agent, and go with the REO listing agent. If the house is good, you’ll be in multiple offer situation, and it’ll increase your chances, plus you do not have to worry if your offer’s forwarded to the bank or not!
* If you insist on your own agent, then he needs to be good with REO transactions. Then again, you wouldn’t be asking it here…
* Be prepared to get some repair bills – 3K & up is minimum I think.
As for the price – it depends on area & how long it’s been on the market. (disclaimer: I’m not a professional but just a prospective buyer)
Listing price seems to get reduced about 5% every 2 weeks of market time. Just my observation. Plus it’s a sellers market – so I wouldn’t expect 20% off unless the property is really ugly.
If the price is significantly below market price, and it just came out, then I would add 15k over asking.
Foreclosure radar or realtytrac shows the loan amount – but I read from internet that it has no bearing in the bank’s decision. They will sell at fair market price, or more if possible, but not that much lower.