Low balling REOs (RE agent, countertop, foreclosure, 9%)

[DocGoldstein]

I have my eye on a second property that is an REO. It's been sitting for 110 days, and fell out of escrow a few weeks ago (don't know why). I prefer to go 50% down, and finance the rest, have a pre-approval letter already. However, I feel the market price of the home based on recent sold comps is about 10 to 15% of the currently listed price. The last price reduction was in late January, and then December before that.

My question for the experts here is, would it be possible to low-ball the property by 10% or more?

I'm more than willing to wait for a price reduction, but I was wondering what others think about low balling, and the best strategies to get an accepted offer.

[399083453]

So make an offer 10% lower. If rejected, wait for a drop and make another offer.

Dont be so afraid of rejection.

[davecj]

I put out half a dozen offers on REOs before I hit the foreclosure lottery on a place in Baltimore. If they say no then you're not really out of any money.

Granted it's not quite the free for all for purchasing REOs like a couple years ago.

[DocGoldstein]

I'm not afraid of rejection, but I'm more afraid of my agent thinking that I'm wasting his time. I wish I could simply just e-mail the listing agent and ask him if he/she would go for it, if not, no skin off my nose. But for some reason I get the feeling a lot of agents think low balling is a waste of their time.

[Squirl]

I picked up a REO property 25% lower than last price reduction. After I made the offer (my agent submitted) and it was rejected, I phoned the listing Agent and told him my offer stands for another 2 weeks or until I had another offer accepted (advising him I was actively seeking a property) -- whichever came first. The house had been on the market for about 180 days. I then advised my RE agent what I had done....she is used to my tactics and gladly lets me handle anything I want as long as she get s her %. Anyway, 10 days later the bank had a conference with the listing broker about how to move the property and my offer came up again and they countered it back only $500 over my offer. So that was a done deal. I was a cash buyer..

[DocGoldstein]

Thanks for your response Squirl.

If it's not asking too much, in general where is the house located? What was the listing price of the house? Was it a fixer, move-in, or somewhere in between?

Any info might help me in my own negotiations.

[Squirl]

Originally Posted by DocGoldstein

Thanks for your response Squirl.

If it's not asking too much, in general where is the house located? What was the listing price of the house? Was it a fixer, move-in, or somewhere in between?

Any info might help me in my own negotiations.

Here are 2 active listings in the community and almost the same as the place I bought. Mine is actually on a better lot, it has a large fenced backyard that wraps around a corner. Mine was originally listed at $69K and dropped over time to $58K. Mine was in acceptable interior condition, all plumbing, HVAC and electricals were fine. It needed some siding repair on the exterior and the windows were foggy. With exterior repairs & window repairs and with a good cleanup it could have rented it out. But I did get new carpeting for upstairs and updated bathrooms and kitchen (all new Euro faucets, granite countertops in kitchen & baths, total reno on the master bath to include double basin sinks & all new tiling, scraped all house ceilings, new paint, exterior paint, too.) I paid a window company to replace panes and also had the exterior siding repaired. I paid $45K and invested another $15k more. Am renting it out for $900/mo. but could get more. Of the 5 properties I have bought in the past 24 months, this is my best ROI -- however I bought another REO a few months ago with similar cost v. rental income -- but I paid 9% below list on that one.

1608 Brentwood Dr Irving TX - Home For Sale and Real Estate Listing - MLS #11739029 - Realtor.com®

2009 Wilshire Dr Irving TX - Home For Sale and Real Estate Listing - MLS #11746039 - Realtor.com®

[DocGoldstein]

Originally Posted by Squirl

Here are 2 active listings in the community and almost the same as the place I bought. Mine is actually on a better lot, it has a large fenced backyard that wraps around a corner. Mine was originally listed at $69K and dropped over time to $58K. Mine was in acceptable interior condition, all plumbing, HVAC and electricals were fine. It needed some siding repair on the exterior and the windows were foggy. With exterior repairs & window repairs and with a good cleanup it could have rented it out. But I did get new carpeting for upstairs and updated bathrooms and kitchen (all new Euro faucets, granite countertops in kitchen & baths, total reno on the master bath to include double basin sinks & all new tiling, scraped all house ceilings, new paint, exterior paint, too.) I paid a window company to replace panes and also had the exterior siding repaired. I paid $45K and invested another $15k more. Am renting it out for $900/mo. but could get more. Of the 5 properties I have bought in the past 24 months, this is my best ROI -- however I bought another REO a few months ago with similar cost v. rental income -- but I paid 9% below list on that one.

1608 Brentwood Dr Irving TX - Home For Sale and Real Estate Listing - MLS #11739029 - Realtor.com®

2009 Wilshire Dr Irving TX - Home For Sale and Real Estate Listing - MLS #11746039 - Realtor.com®

Thank you for the info.

It seems like you got a fairly good deal or the stars seemed to align for you.

[Silverfall]

Originally Posted by DocGoldstein

Thank you for the info.

It seems like you got a fairly good deal or the stars seemed to align for you.

10% isn't a lowball offer, in my opinion. If your agent isn't willing to write offers at that price, you might want to find a more aggressive buyer agent. Now, if it had just shown up on the market that would be a ridiculous offer, but 110 days for an REO...10% isn't lowballing.

If it is Freddie Mac or a HUD house, it will be a waste of time to go that low, but most other banks, I'd go for it.

[SouthernBelleInUtah]

Originally Posted by DocGoldstein

Thank you for the info.

It seems like you got a fairly good deal or the stars seemed to align for you.

No, Squirl is just an extremely savy landlord! Don't know them personally but have seen enough posts of theirs to have figured that out.