What's Up With REO Price!
hi,
I placed a bid a reo property. it is a nice affordable neighborhood with great school district.
it is 56 years old all brick, 4 beds 2 full bath, 1600 sq. it is not badly shaped.
depends what i am going to do with it. If i plan to rent it out, the fix is going to be around 5-7k, if i need to fix and flip, the kitchen needs to be redone. so it is several thousands there.
anyway,the asking price is 98000, the FMV should be around 110000. Actually there is another identical rehabbed house 200 feet away has been for sale 3 months by a realtor for 115000 and no luck yet. i placed bid of $78000 in cash. can close right after inspection. and then realtor emailed me saying he has already have 4 bids above asking price. if i want to increase my offer, i have to go at least $100,000 :(
isn't it crazy? I do have a question, how do i know the realtor is telling the truth that he does have offers above asking price???? I am going to pass this one if it is really over 100,000, actually my plan was pass if it is over $85000.
Did you actually submit the offer or just call it in?
I would submit the offer and ensure you get a response from the sellers. More than likely the Realator is pulling your leg.
If they have offers ABOVE the asking price the REO will sell immediately depending on the contigencies they put in their contracts. The bank has drawn their line on what they want, the $98K and you have set your price $78K.
You should be willing to hold your line too. Make your offer and find the next deal, make your offer, etc. If by some chance you get multiple offers accepted sometime down the road, now you get to pick and choose.
The biggest obstacle I see with REO is getting the offer accepted. You may need to contact the bank to sell your offer a bit or include a list of items needing repaired or negatives about the property with your offer just so the bank sitting somewhere half way across the country has a clearer picture of what condition the property is really like.
thank you for your reply.
I called the realtor and realtor said i can make an verbal offer, so he asked my last name and offer price. that's all. and next day he emailed me and say that i have to offer more in order to get the house.
the forclosed company is TMS mortagage. i don't know how to contact them.
Talk to another realtor...
Well you have the right to submit an offer and have it reviewed by the Bank without contacting them. I would put the offer in and make sure you list some of the major items that are wrong. Like this:
Buyer will:
1. fix this
2. fix that
3. repair this, ect.
It may help give the bank a more clear idea on what is really wrong with the property instead of some high value assigned by a realtor that's wants as high as a commission as possible.
If you haven't figured it out yet, some (most) realtors put things on the market and do very little marketing, they just hope it sells for as high a price as possible and they aren't going to come down until instructed to by the Seller.
The Realtor was trying to get you to bring your offer up. Put the offer in at $78K and stay persistant.
Hey,
I don't know if the agent is full of bull or not, but why are you so shocked by the banks response???
They have a house that is worth $110k, and needs some minor repair, and they have put it on the market at $7k DISCOUNT. You believe it to be a desireable neighborhood. Do you not think that there are RETAIL buyers out there looking for houses like this one?????
I have said it so many times...banks are not as stupid, lazy or greedy as everyone seems to think.
You could have made your offer (all cash) even more interesting to the bank if you had dropped your inspection clause.
hi, all
i am not shocked by bank's response. actually i don't even know bank has a response or not. I do realize it is a good deal for retail buyers. say if i need a house to live not to invest, this is definitely the one i would buy. my question is i don't know the agent is telling me the truth or not that i have to bid at least $10,0000 or more in order to be over other people's bid. If it is true, then i have no problem with it, just pass this one and move on. If it is not then it is a bull!!!
As a Realtor who regularly lists REO properties, I can tell you 3 things:
1) I would never "pull someone's leg" for risk of losing my real estate license;
2) With my REOs, because of the process of submitting offers (usually online in a summary format until an agreement is reached on terms) I would happily take verbal / summary offers and then get it written later when the terms are accepted;
3) My REO clients (banks) are STUBBORN on their price and they DO NOT give breaks on these houses once they are listed unless they have been on the market a long time, and even then it's tough. If you want a deal, get it pre-foreclosure on a short sale. At least here in MN, the REOs are full market value (and sometimes higher) and these CA lenders/asset managers aren't budging!!
The more I list these REOs, the more my take on getting a "deal" on them changes - it ain't happenin - at least not here or with my clients.
Best of luck!!!