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We have recently put in another offer on a house since our previous contract (on a short sale home) was squashed by the PMI company. This recent offer is on a already foreclosed house that is bank owned. It has been on the market as a REO since November. They have had no offers at all on it.
I was wondering what your experiences have been in dealing with REOs. Have they been willing to negotiate? Or are the listing prices firm? We are looking to put down roots and of course would like to get the biggest bang for our buck. If it makes a difference, the house is located in Manatee county, Florida. Our offer was roughly 15% off of the listing price.
Location: Mokelumne Hill, CA & El Pescadero, BCS MX.
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Most banks have an aggressive price reduction strategy on their properties, but they want to get the currently listed price.
We had a REO for sale with an offer at the listed price but the buyer ran into a last minute problem and couldn't close for five days after the agreed on price. The bank wanted to keep his 5K earnest money and then told us to reduce the price by 10K the next week. The buyer could have bought it for 10K less, given up his 5K deposit and still been ahead by 5K. If we had represented the buyer that's exactly the advice I would have given him.
I couldn't believe how hard it was to convince the bank that they would be ahead of the game if they just agreed to give the buyer the extra five days to close.
Dealing with REO's is much easier than short sales. We don't have a ton of them out here in Salem Oregon, compared to other parts of the country. I find in the current market banks are willing to deal with SOLID buyers.
Location: central, between Pepe's Tacos and Roberto's
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Quote:
Originally Posted by boyohboyohboy
We have recently put in another offer on a house since our previous contract (on a short sale home) was squashed by the PMI company. This recent offer is on a already foreclosed house that is bank owned. It has been on the market as a REO since November. They have had no offers at all on it.
I was wondering what your experiences have been in dealing with REOs. Have they been willing to negotiate? Or are the listing prices firm? We are looking to put down roots and of course would like to get the biggest bang for our buck. If it makes a difference, the house is located in Manatee county, Florida. Our offer was roughly 15% off of the listing price.
Any insight will be greatly appreciated!
Why did the PMI company kill the deal? It may be likely to happen again. Most of the MI companies are on the same page as far as risk management, and are really pulling back.
A bank is just like any other seller they are going to look at the last comps sold and get as close to the the market value as possible. Don't assume an REO or a short sale is always the best deal. Remember, you are buying a home with limited disclosure.
However, if there are REO/Short Sales in the neighborhood you may be able to negotiate a better deal overall with a regular seller plus you get a home with full disclosure so you know of any major issues, etc.
But what if the house you are buying is trashed and are comps would not reflect that as they would generally be homes in good condition?
We are looking at making an offer on a foreclosure tha thas been on the market about the same amount of time as the OP. It also has had not offers, they have been dropping the price, but they originally priced it like the comps in the area and it needs 20 to 50 thou of work to get it liveable. Le tme say it has zero curb appeal right now, but I have imagination! Will the far away, non local national bank consider that when they get our REALLY lowball offer today? Will they take in to account that the realtor has told us everyone who has looked at it has said they cannot possibly do the work it needs. (My DH and son can do all the work themselves.)
REO are notorious for slow response. It doesn't hurt to make an offer, though. The worst they can do is say "NO"
Actually, I take that back. The worst thing that can happen is that they say "YES" and you grossly underestimate the amount of work needed. I wish you the best of luck, though.
General rule is the bank has it's limits most of the time if the house is enough below market value then go with full asking price the bank wants.
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Good luck !
Last edited by da jammer; 03-18-2008 at 02:55 PM..
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My low offer
Foreclosures
