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House has been on the market for 6 mths, it was first listed at $195K, now it is listed at 162K. It is appraised at 195K... average price of houses in the area is 157K. I offered 135K since it will need a new boiler, gutters installed, replacement windows... what do you guys think?
Here's my experience with a similar lowball offer on an REO.
Stats:
Time on Market: 8 months
Opening list price: $180k
Current list price: $139,900
Appraisal: $181k
Comps in area: $145k
Repairs needed: Vinyl siding has numerous holes on one side of the house due to hail storms, broken window in garage from the hail, unfinished wiring on garage door opener, 2 bathrooms with broken toilets (colorful toilets that can't be matched), once the toilets are replaced the tubs and sinks will be mismatches and either need replacing or refinishing/recoating, miscellaneous missing fixtures (shower, sinks, lighting)
I offered $117k. The listing agent told my agent that she was pushing for the bank to take the offer since she had no other offers. 5 days later, they turned my offer down flat without even countering. Listing agent said my offer was so low they didn't take it seriously.
So, I've read stories about REO offers from all over the spectrum. You may have better luck than I did, and I wish you lots of luck. I hope you will come back and tell us how it turns out. As for me, I am about to make another offer on the same property. I really like it in spite of the issues, and it is still on the market nearly a month later.
Hard to say how the banks react these days - no rhyme or reason to responses.
You might get lucky and get a decent counteroffer, or they might turn you down flat.
Of course, it still being on the market after 6 months is in your favor - means people haven't been beating down the doors to buy it! Or, they haven't gotten any offers they're interested in.
When we were looking at REOs my agent told me they usually work on a matrix/schedule, such as: Accept offer if within 5% of current asking price, after three weeks on market reduce price by 10% but still accept offers within 5% of new asking price, after three more weeks reduce price another 10%, etc. I don't know what the actual numbers are - I'm making these up as an example. But if your offer doesn't fall within that schedule, then they won't accept it. You just have to wait until the price falls to what you want to pay for it - if it's still on the market.
We are about to close on a Homepath house - the asking price was $114k, we offered $105k, they countered at full, we went back at $107k and they accepted. So if they do reject your initial offer don't just jump up to a much higher number.
If the house appraised at 195k they are not going to accept your offer point blank. ...
Reggie
I agree, if it appraised for $195, why would the bank agree to come down so much? Who did the appraisal - the bank? How old is it? Do you have comps that justify a lower price? Average price is not really all that relevant if the home is not "average".
Hi guys, no news yet, just waiting... I hate waiting!!!! I believe the offer time limit expires on Friday, so we will see. My agent just texted me that she just left a message to the listing agent. Hoping he will get back to us soon. It is owned by freddie mac homesteps btw, if that is relevant.
rjmcm: I believe that the bank did the appraisal, am not sure when it was done?? My agent did some comps... the price ranged from the 150s to 170s. This house will need around 20K of work so this is why we priced it so.
This is the price history according to Zillow (not sure how accurate the site is):
Listed for sale * $162,000 -5.8% $81 Prudential Pequot Properties 05/02/2011 Listing removed * $172,000 -- $86 Prudential Connecticut Realty 03/03/2011 Price change * $172,000 -5.5% $86 Prudential Connecticut Realty 01/29/2011 Price change * $182,000 -7.3% $91 Prudential Connecticut Realty 12/24/2010 Listed for sale * $196,350 -- $98 Prudential Connecticut Realty 12/24/2010 Listed for sale * $196,350 -33.4% $98 Prudential Real Estate 10/26/2005 Sold $295,000 -- $148 Public Record
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