The offer has to be based on your perceived vaue at the time you make an offer. Tax value, in a declining market, is not a true indicator of current value. You have to research MLS sold stats and go from there. If you are working with a Realtor on the REO, they should be able to help you get that information.
Sold stats should be reviewed for original listing price, price reductions, days on market and buyer concessions the seller is paying. All fo these factors will help determine a realistic value.
If there was a simple formula and/or equation to establishing present value (and getting the bank to agree with you) this would be a very simple business.
There are all kinds of fancy formulas, but i would recommend to just hit them hard. I go with a realtor look at about 8 REO and make offers on all at 50% of asking you will be suprised at how low below the orignal loan they will go. one lender will always crack and i will buy one for sure sometimes two usually around 60% of asking. works best at end of quarter and especially at year end.
I just signed a contracts on my first REO. I use the formula of 65-70% of ARV minus repairs. You may want to start lower to accomadate counters. I feel this is a game and offer my bottom line to start. Most are rejected. I follw them and as the prices lower and get closer to my bottom line, I resubmit. I have found that the key is to get lots of offers out there. I have had a 1 out of 20 ratio of acceptance. Good Luck!
it can be what ever you want. just be prepared for them to reject it.
I think you are missing my question. What do you base your offer to the bank on? Be it asking price, FCV, Total Imp value or what. Sorry new at this.
The offer has to be based on your perceived vaue at the time you make an offer. Tax value, in a declining market, is not a true indicator of current value. You have to research MLS sold stats and go from there. If you are working with a Realtor on the REO, they should be able to help you get that information.
Sold stats should be reviewed for original listing price, price reductions, days on market and buyer concessions the seller is paying. All fo these factors will help determine a realistic value.
If there was a simple formula and/or equation to establishing present value (and getting the bank to agree with you) this would be a very simple business.
even after looking at comp, that does give me a good feeling.
I am in a deal right now where another bidder is willing to pay north of 6M for an office property. I am not, So I may have to walk from the deal.
There are all kinds of fancy formulas, but i would recommend to just hit them hard. I go with a realtor look at about 8 REO and make offers on all at 50% of asking you will be suprised at how low below the orignal loan they will go. one lender will always crack and i will buy one for sure sometimes two usually around 60% of asking. works best at end of quarter and especially at year end.
I just signed a contracts on my first REO. I use the formula of 65-70% of ARV minus repairs. You may want to start lower to accomadate counters. I feel this is a game and offer my bottom line to start. Most are rejected. I follw them and as the prices lower and get closer to my bottom line, I resubmit. I have found that the key is to get lots of offers out there. I have had a 1 out of 20 ratio of acceptance. Good Luck!
"Recently listed" (around here, anyway) means about 3-4 weeks.
After that the price starts dropping like a stone!
Chris