BiggerPockets

Purchasing Bank Owned Property in NJ - Come Quick, and Come High

Wednesday, November 10

Investors are constantly asking me 'Why can't I get my offers accepted by the banks?'.  So many investors are making multiple offers on REO properties, and aren't closing on any REO's.  The answer is simple: banks are pricing the properties to sell.  They are getting close to, if not more, than asking price in almost ALL cases.  In order to get your offer accepted by the bank, you need to come quick and come high.  In many cases, offer's $20,000 below list won't even get you a counter offer.  Sure, in some markets, it is a good start if you and the seller are willing to meet in the middle. But in the inner city areas, multi family properties are stripped of the plumbing, need to be 203k or cash only, and are priced below $50,000.  Cash investors are pouncing on these income producers, resulting in multiple offer situations and prompting the bank to request highest and best from all parties, sometimes up to 20 offers the first week, depending on the area, but regardless of the condition. 

It's always a good idea to look at the days on market of the REO property.  If it's been sitting for a month or so, check to see if it has been reduced.  The banks will almost always reduce list prices monthly until a sale is procured.  But hold out too long, and you'll miss it.  Best bet: Come quick and come high.  Offer too low, and you're spinnin' wheels.  Yours and your agent's. 

I personally set my investors up on an autoemail.  Whenever we list a new bank owned property that fits a certain investor's criteria, they get notified immediately by email.  REO is all we do.  We list new properties every week, and always have more under contract than we do listed!  Do you want to just keep spinnin' wheels, or do you want to be a successful Real Estate investor who buys bank owned properties?  If you chose the latter, then you need to come quick, and come high. 

Comments

1. 

   Charles Perkins Reply
   over 1 year ago

   I have purchased a few REOs in the past, not many though recently. Interesting to see that the NJ market is showing this kind of activity.

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