Buying a Bank-Owned Foreclosure – a true story

A timetable and description of events from an offer made on a bank-owned foreclosure condo in Chicago and the outcome.

I recently represented a buyer for a condo on Chicago’s northside neighborhood of Edgewater/Rogers Park. It was listed below $80,000 which seemed extremely low given the fact that upon my research of similar units which had sold in the past 6 months there had been an identical unit in the same building which closed at $250,000! When I called the seller’s real estate agent I asked why the price was so low; it seemed that the extremely low price was being used to bait the buyers to create an auction-like setting and his response was “My BPO value is not important the list price is what the seller is asking”.

In the end there was a deadline imposed of 3 days for buyers to make an offer before the offering would stop. My buyer made his offer and we were told the bank would respond in about a week. I was told that there were a total of 6 offers submitted. Our offer was $25,000 over the asking price. In the end the property was sold to a different buyer; we don’t know what the selling price was; we’ll have to wait until it closes when it is published public data.

The lesson to be learned from this: properties which are owned by a bank in a foreclosure sale may be offered at an artificially low price which is totally unrelated to the market value. So do your homework and make an offer which you feel comfortable with so that if you don’t get it you can still feel good about your offer. That’s what we did and now it’s time to move on…

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