I want to see the bank's appraisal and write them a buyer letter

[Jacqueline Mann]

I'd like to make an offer on an REO. It will be a major rehab. Comps are $175K. I estimate repairs at $42000. My formulas tell me to offer $79000-82000. The bank is asking $125K. I'm concerned that the bank will not take my offer seriously.

Two questions: 

1. I'm thinking of writing a "buyer letter" to the bank explaining my offer and what the house needs. Do banks read those? What do you recommend go in it? The letter templates I see online are targeted towards writing to emotional homeowners. 

2. I asked my Realtor if he can get a copy of the bank's appraisal and/or BPO so I can understand how the bank came up with it's offer price.  Do banks generally turn those over? If the appraisal supports a price of $125K, then I'm walking away. I don't see a deal here.  

[Roy N.]

@Jacqueline Mann

You will not offend the bank or their agent ... offer what you believe is the correct price.  If they dismiss it, wait and come back in a month or two.

Once you have a rapport with a lender or their agent, they may verbally tell you the a rough figure from the appraisal, but are unlikely to give you a copy (at least here).

When a lender initially lists a foreclosed or power of sale property, they are more apt to set the ask price based upon what they are owed on the property - unless that amount is seriously disconnected with the market.    Since time is money and it costs additional money to heat and maintain an empty property, the longer the lender holds the property, the more toxic it becomes to them and eventually they will cut it loose a better price (I've seen it take 2-3 years for a lender to arrive at what I would consider a supported price on a particular property.