How much to bid on bank property?

Hi all,

I'm hoping some of you wise posters on here may be able to help advise when it comes to bidding on a bank property.

We've recently viewed a house which we are extremely eager for (haven't told the EA that of course!) which is being sold by a bank.

The house, whilst relatively modern needs a lot of work done and there are a number of issues with it that is no doubt off-putting to other prospective buyers and which may cause a problem for FTB's in getting a mortgage - not an issue for us however as we would be cash buyers.

The problem is we're not sure how much to bid. We're aware of a number of issues which would scare most buyers off, but it's something we're willing to take a chance on. Because of these serious issues however, we would be thinking of placing an offer about 40% less than asking price to begin with.

Whilst we don't want to be laughed out of the place with an offer such as this, we also feel that we're in a strong position to negotiate as the house has been up for sale for about 6 months and whilst there has been good interest in viewings, it is apparent that once the issues with the house become known, potential purchasers back off. We would be cash buyers and able to close the sale quickly if the bank accepted our offer.

Lets say for arguments sake that the house in question has a sale price of 100k, we would be thinking along the lines of offering somewhere in the region of say, 60k with a view to upping our offer up to about 70k if needs be.

Does anyone know what banks are like when it comes to accepting offers on bank sale properties these days? Are they rigid in wanting to hold out to get as close to the full asking price as possible, or has anyone negotiated deep discounts on "undesirable" properties or those with a history in order to be shot of them?

Are we realistic in thinking that we might be able to get say, a 30% reduction on the asking price - are banks flexible when it comes to negotiation?

If anyone has any experience in making offers on bank properties we would love to hear how you got on in the end and found the whole experience.

You should start from a position of how much you think that the house is worth rather than what the lender thinks it's worth. You would need to have a very good idea of how much it's going to cost to remedy those faults.

If they are asking for €100k and you think it's worth €100k, then there is no point in offering €60k. Start at around €80k.

If you think it's worth only €80k, then it's more difficult. You should start at around €65k but you know that will get nowhere. So you should probably say to the auctioneer "It's clear to us that the house is way overpriced. We are cash buyers and we are interested. Please come back to us when you make a substantial reduction in the asking price. "

It would probably be no harm to have your homework done. For example - tell them that a comparable house sold for €90k but it did not need the €30k of work which this house requires.

Brendan

Hi Brendan,

Appreciate you taking the time out to reply and advise

To be honest, taking the figures again at say an asking price of €100k, we would probably be looking to put a bid in around the €60k mark and working up to €80k if needs be at an absolute maximum. Though it probably would be worth the hypothetical figure of €100k, there is an awful lot of work that needs doing on it, and then there are issues which could arise in the future with the property which could devalue the house drastically, and of course, the day you buy is the day you sell...

Some advice given by helpful neighbours who know the house and its history was to offer somewhere in the region of €40-50k.

Unfortunately, no other properties in the immediate vicinity have sold recently (or at least none that I could find on the PPR.) in order to compare like with like.

Certainly lots to think about there Brendan, thank you.