Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
May be it's the realtor who cut the price without the bank knowledge. Can they do that? Or may be the bank was hoping a bidding war will break out. Somebody will come along while they are playing counter-game with you. Who knows?
Did you include closing costs in your offer? Maybe they are countering above to make you "pay" for your own? If you want the house, make the deal work, I wouldn't take thier counter, but could you meet them in the middle, or just stick with your offer of 180k.
Most likely, the agent lowered the price according to a schedule the bank agreed to as standard procedure.
ie. if the house doesn't get an offer in 2 weeks, lower the price 5%
if it doesn't get an offer in another 2 weeks, lower the price another 5%
or whatever.
The bank might not even realize what the current listing price is.
Case study:
We had buyers make a full priced offer on a REO, there were competing offers and they buyer got outbid. The winning bid buyer's couldn't get financing and the house went back on the market at a lower price.
Our buyers made another offer, full priced again at the new lower price. There were again competing offers and they got outbid. The winning bid buyers (different people than round 1) also couldn't get financing. The house went back on the market... at a lower price.
We called the agent and asked what the deal was. He said not to even bother putting in another offer, since he had like 8 on the table already. We wanted to call the bank and tell them their agent was a complete moron, but we didn't.
Why lower the price if offers are coming in at a higher price? Some of these agents who have exclusive deals with banks are closing multiple deals a week. They don't have time to deal with the details and leave it to assistants. In addition, the lower the price, the faster the offers and the faster they get paid. They take advantage of the banks not knowing the true value of the properties, which also hurts the guy down the street who is trying to sell his home for what it is really worth. Greedy b******s give honest real estate agents a bad name.
I have seen it happen a couple of times with bank owned property. Any given property has an acceptable bottom line price after closing costs, seller assist and so on are applied.
So, at the asking price of $180k, the bottom line is in the $160's. That's after deductions for commission, closing costs and perhaps seller assist. You're offer would have to be in the high $170's to make it work for the bank.
Take the commission & closing off the $180k. That leaves the bank with roughly $167k. Throw seller assist into the mix and the figures change considerably. Let's look at it another way...
$167,000 + $9,000 = $176,000
$176,000 + 4,000 = $180,000.
The extra seven grand they want may be seller assist? You didn't specify.
Some of these agents who have exclusive deals with banks are closing multiple deals a week. They don't have time to deal with the details and leave it to assistants.
Thanks for your post. I got caught up in a similar situation 2 months ago. Put in an offer above asking on an "aggressively priced" REO. My agent was never able to talk to the listing agent directly, the assistant was always the bouncer. My agent would even try to email the listing agent directly, but the assistant would respond instead. In the end the listing agent received an all cash offer $10K above asking and presented that offer to the bank.
The extra seven grand they want may be seller assist? You didn't specify.
What is seller assist? I don't even know what that is.
I'm doing a conventional bank loan. I did ask the seller for $2K towards closing costs, but that is it.
The listing agent only gets 2.5% commission (as negotiated by the bank, not by me)
I'm sure the buying agent commission is about the same.
It is very common in CA right now for REO houses to sell for above asking. Putting in a offer less than will get taken out by someone else. But they don't counter offer, they just take the best and highest.
A seller (bank or private seller) may lower or raise the price anytime they wish.
In my market I've seen banks list a property at a low price and then wait for multi bids to come in. They are often trying to start a bidding war.
Pricing is all supply and demand. If they feel they can get more than the list price - they will try to get it.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
