There has been a great deal of hype lately regarding “Bank Owned” or “REO properties”. Many investors and home buyers are under the impression that the banks are making huge concessions on these properties and selling way below market value. While “great deals” do exist, we are finding that the banks are expecting to receive a price relatively close to the price listed. In some cases they are willing to look at offers slightly under asking price (i.e. $10-$20K under on an approximately $500K house) however, we are noticing that they are not entertaining offers that come in ridiculously low (i.e. $50K-$150K under on a $500K listed house). Every bank is different and we are not arguing that exceptions do not or will not exist in the future, however, DO NOT limit your search to only bank owned properties. There are some GREAT deals out there on the homes for sale that are still owned by the home owner! From our experience, sellers who need to or want to sell and either have equity in their house or have cash reserves to bring to the table at closing are making significant concessions off the listed price. The important part is that the sellers have to have the means to make the deal work (either through equity or reserves).
You will find that the agents who are representing these sellers are encouraging buyers to put any and all offers in writing. Sellers are instructing their agents to present any and all offers to them. So, what does this mean to you? Look at all homes on the market right now. Expand your search to include homes slightly out of your price range. If you find something you like, get in touch with your agent or give us a call. Find out what the latest comparable properties sold for and decide what price you feel comfortable writing at. All it takes is a phone call. Then us or your agent will call the seller’s agent and find out the situation. If they are open to reviewing all offers it doesn’t hurt to put something in writing. That is your agent’s job; to communicate your situation and find out the seller’s. Our expertise is in negotiating on your behalf. If it makes sense to write an offer and the seller will not take offense to a lower offer price, try it out. You never know where it will end up. We have seen many buyers and sellers come together on a price that works for both parties.
