Real Estate News & Updates from the Monadnock Region
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Why wont the bank accept the offer I made?

May 23rd, 2011 | Posted by Dick Thackston in Buying Tips | Real Estate News - (0 Comments)

By Dick Thackston

I hear this question all the time from people who make offers on bank owned properties. The story generally goes this way: a buyer has been looking for a home in a certain area for six months, in a certain price range, let’s say between $150,000 and $170,000, then a property goes to foreclosure in their desired neighborhood. The buyer is aware of the foreclosure and contacts us about looking at the home before the bank puts it’s on the market. They wait a few weeks while the bank does appraisals to determine the Fair Market Value, FMV, of the property. The bank determines that the home is worth $165,000 so they put the home on the market at $159,900.

We schedule a showing with the buyers and they immediately are excited about the home after the look at it! Good News! They go home to think about it; the next day they call our real estate office for an appointment to make an offer.

When we meet to write up the offer they decide they want to offer $130,000 because they’ve “heard” that banks will take 20% off the asking price. As a buyer’s agent I advise them that their offer is un-realistically low but the buyer insists and I submit the offer.

The bank immediately rejects the offer without a counter proposal. The buyer is mad and says: “Why won’t the bank accept the offer I made?”

Here’s the answer to the question. The bank that owns the property has a responsibility to obtain the best price they possibly can to pay back the money owed on the property. They know, as does the buyer that the property is fairly priced. What the buyer doesn’t know or understand or believe is that the bank can wait.

The bank can wait because interest rates are at historic lows. Here’s what the bank sees financially: how much do they can how much do they loose by not taking this offer. The buyer’s offer is $29,000 below the asking price. The bank will figure how long it can carry the property to be in the same place assuming the bank’s cost to carry the property calculated at 3% their cost to carry the difference is $72.50 per month. So for a $29,000 difference the bank can carry the property for 400 months or thirty-three years and four months before they make up the difference.

That’s why the bank won’t accept or negotiate on un-realistically low offers. Banks are very sensitive to actual market conditions, they are making excellent “deals” with home buyers but they won’t leave money on the table if they don’t have to and it doesn’t make sense financially.

The best plan if you want to successfully negotiate with a bank on an REO property is to be financially organized, (have a pre-approval letter from your lender, have your down payment available), have a buyer agent in place to help your write a realistic offer – without unnecessary conditions, make a reasonable deposit and be the first person to submit your offer.

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What Happens When Someone Dies Who Owns Real Estate?

May 18th, 2011 | Posted by Dick Thackston in Real Estate News - (0 Comments)

By Dick Thackston

The simplest answer to this question is it changes owners; the problem is to whom, how and when.

Many people do not fully think through or plan for the disposition of assets after their death. While the situation ultimately affects us all, the situation has been worsened with the current collapse of housing prices and over mortgaging. Sadly the lack of planning results in confusion as to ownership, costly legal fees and time consuming delays for the family and friends trying to resolve estates. The worst situation can be over promising by the deceased and the heirs or presumed heirs are at each other’s throats while waiting to ride a dead man’s horse.

In the last several months we have seen several of these situations pop up.

There are two cases that seem worth a quick look:

Case #1 Husband dies with an old Will and a new wife. The husband owned a home prior to marrying the new wife but never adds her to the ownership of the property.

In this situation the wife does not automatically own the property. In fact she may not have any equitable rights to the property what-so-ever. Depending upon how well everyone involved gets along this could be quite messy with no Will to the contrary and a written Will specifically leaving his property to someone other than his wife at the time of his death, the Probate Court might determine that his intent was not to leave the property to his wife. What might the wife’s reason to the Probate Court be for vacating the old Will? She will need to hire an attorney to petition the Probate Court, vacate the old Will, settle with the other natural heirs – this means pay them for a share of the property and hopefully be awarded ownership of her home.

Case#2 Elderly parent dies with a Will and leaves his home to his two sons however the property is heavily mortgaged and the son’s did not know there was a mortgage and have not made any mortgage payments. The property is now being foreclosed upon.

Death does not eliminate the mortgage; the money is still owed to the lender. In this case the first thing the sons should do is advise the lawyer that is probating the estate of the situation. In all probability the bank will stop the foreclosure temporarily while the estate is being sorted out, however this is not because they are being nice. In this case the lender becomes a creditor of the estate and will probably look to the Probate Court to pay the full balance with all interest and fees due out of the estate. The sons will only normally be entitled to whatever is left over.

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R.H. Thackston & Company announces that two agents have joined the New Hampshire Commercial Investment Board of REALTORS.

May 10th, 2011 | Posted by Dick Thackston in Real Estate News - (0 Comments)

Keene- R. H. Thackston & Company REALTORS with offices in Keene, Winchester and Bellows Falls announced that two agents have joined the New Hampshire Commercial Investment Board of REALTORS.

Both are experienced REALTORS with extensive knowledge of the real estate market in the Monadnock Region.

Bill Maxwell has been actively involved in Commercial Real Estate in Southwestern New Hampshire and Southeastern Vermontfor over twenty years. He has an extensive knowledge of construction as well as redevelopment and investment property management. Maxwell is also a licensed Florida real estate Sales Person.

Dorrie O’Meara has an extensive background in commercial retail space development and management as well as multi-family apartment renovations and planning. O’Meara has been actively involved in the redevelopment of downtown Keene over the last several years. O’Meara is a Graduate of the Realtors Institute and holds the designation of GRI.

 Both agents are members of the National Association of REALTORS, New Hampshire Association of REALTORS and the Northern New England Real Estate Network which provides Multiple Listing Data to both New Hampshire and Vermont.

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