Rate My Play For This Foreclosure Listing

[Matt Schelberg]

A foreclosure I offered on (and lost) 40 days ago fell out of contract. The listing agent came back and asked if my offer is still good. Please analyze my play for this property!

Background:

Property is a Baltimore City rowhouse with approx. 20k-25k in rehab costs. Needs new kitchen and roof. Best suited as a rental. Listed at 80k. I would not pay more than 61k.

Seller is a local government administration.

Bidder 2 is an inexperienced investor.

Hero is unknown to listing agent and seller.

Order of Events:

Listing Agent: Lists property for 80k.

Hero: (List Date + 5 days) Visits, evaluates property. Submits offer for 60k (would not pay more than 61k).

Bidder 2: (List Date + 6 days) Offers 68k.

NO OTHER OFFERS.

Bank: (List + 7 days) Accepts Bidder 2’s offer of 68k.

Listing Agent: (List + 40 days) Calls Hero’s agent and says property has fallen out of contract. Says winning bidder was a young investor who got too excited and perhaps didn’t know what he was doing; backed out of contract. Listing agent asks, “Is your offer still good?”

Hero: (List + 40 days) Replies that original offer is still good but asks to see property again, as it has been over a month and this is Baltimore; the copper could be long gone. Hero visits property. Copper is still there but the dishwasher has been pulled away from the wall and a cabinet is damaged (suspect Bidder 2 was rough in his inspection, but kitchen needs demo so this is not a concern.) Hero re-submits original offer of 60k and adds contingency clause for 7 day inspection period to ensure there is no other damage.

Listing Agent: (List + 41 days) Submits offer to Bank and informs Hero's agent that there are no other offers. Changes property status to "active" in MLS.

Bank: (List + 44 days) Counteroffers 67k. Listing agent says there have been no other offers.

Hero: ???

Feedback: What is Hero’s next move as played? (The max I am willing to pay is 61k).

How would you play it differently (if at all?)