Real Estate Investor · Williamson County, TX · Member since 2011 · 1k+ posts · 961 votes
This is kind of a duplicate of an earlier post. I hope others will share. My properties were in Williamson County Texas which has a fairly high foreclosure rate considering how well Texas has been weathering the recession.
My last deal:
Duetsche Bank Jan 2011
Original list 99k
List 89k
DOM 90+
Bid 74, Bank countered 79,
agreed on 77 but negotiated 10k off because slab sloped so 67k, 10k in fix up (didn't fix slab as minor) and rented for 1000 month
Deal 2 July 2010
HUD list 160k, bid 139k the first day it went to investor bid and was the only bid. (8k Tax credit had expired) Bid accepted. $300 fix up and rented for 1175 per month--in 10 days. Currently rented for 1325. 15 year note with Chase at 4.5% with 25% down.
I want to hear about some low offers that got accepted!!
Closing today on a property that is in pretty good shape compared to what I normally see and buy. It started at $300,000 which was wishful thinking on the banks part. The arv is around $350,000. After 30 DOM they dropped the list price to 275 and then to 255. I offered 235. The banks realtor came back and said the lowest the bank would ever go was 245. He stated the bank would rather sit on it. I held firm at 235. Got a call 2 weeks later asking me to resubmit my offer for $235,000. House needs $35,000-$40,000. House already has new windows, nice landscaping and a new roof. The old owner took care of the place. We start work on it this Friday.
I was never able to get the offers out of the realtor's office. price was too low for the commission so even though they are "supposed to be obligated to submit all offers", they refused to submit the offers. What a shame.
Not me, but a buddy of mine that I helped with the deal. He just bought a mold house that was all over 100k listed, it was built in 2004 for over 200k, and I told him to offer 60k and he offered 70k and he got it accepted. He is almost done rehabbing it now, and it is beautiful. He is all in with repairs for around 100k. :mrgreen:
P.S. If you look at my status video, I have it on there.
I was never able to get the offers out of the realtor's office. price was too low for the commission so even though they are "supposed to be obligated to submit all offers", they refused to submit the offers. What a shame.
If the agent told you the offer was submitted, but then you found out it wasn't, report them to their broker or to the Real Estate Commission...this type of behavior shouldn't be tolerated.
Then find a new buyer's agent. Most REO properties have a minimum commission of $1000 (regardless of how low priced the property is), which is usually enough to motivated agents that typically deal in these types of properties.
Closing today on a property that is in pretty good shape compared to what I normally see and buy. It started at $300,000 which was wishful thinking on the banks part. The arv is around $350,000. After 30 DOM they dropped the list price to 275 and then to 255. I offered 235. The banks realtor came back and said the lowest the bank would ever go was 245. He stated the bank would rather sit on it. I held firm at 235. Got a call 2 weeks later asking me to resubmit my offer for $235,000. House needs $35,000-$40,000. House already has new windows, nice landscaping and a new roof. The old owner took care of the place. We start work on it this Friday.
This might be off topic, but how are you guys getting these? I can't seem to get anything under contract. I've put in numerous bids but can't get a counter.
Are you guys upping the EM or removing the option period?
This might be off topic, but how are you guys getting these? I can't seem to get anything under contract. I've put in numerous bids but can't get a counter.
Are you guys upping the EM or removing the option period?
If you're not getting counter-offers, your bids are likely too low (assuming you're contracts are being submitted correctly, of course).
Can you give a couple examples of offers you've made -- list price, offer price, contingencies, etc?
I see a lot of you are selling or wholesaling for more or around the same price as what the banks had them listed for. Why wouldn't your buyers have just scanned the MLS or found a realtor to do that for them and get them at those low prices?
Finally got an executed contract today after 9 days (after agreeing on price) of messing around with a newbie listing agent on a Freddie Mac property. Original list price of $49,900. Wanted to view with an idea of offering $35k based on MLS pics. List price dropped to $30,900 before I could make it there to view in daylight. Offered $27k, they countered with $28.5 and I accepted. I'm glad they countered because I would have gone $32k with 'highest and best'. House needs about $700 to get it rent ready for $750/month.
I see a lot of you are selling or wholesaling for more or around the same price as what the banks had them listed for. Why wouldn't your buyers have just scanned the MLS or found a realtor to do that for them and get them at those low prices?
We don't often wholesale (we normally rehab and resell ourselves), but wholesaling off the MLS isn't too hard if you can find a decent deal, take better pictures than the listing agent, write better marketing copy and treat your buyers well. Oftentimes, buyers don't like to buy REOs because the process is tedious, but if you can change the process, they're all for it.
Great responses. It looks like FNMA will accept offers of 77% in some markets. BofA 74%. Other banks 70%. My Deutsche offer was 87% 90 DOM and HUD took an offer of 87% on the first day open to investors.
Anson, I am curious as to whether the banks countered on your offers; and if so what was your first offer? How low can you go and be taken seriously?
Eduardo, maybe the houses you picked were too pretty. The nice ones in my area often sell close to list.
Hi this is my first post and first property other then my home.
Close on Wednesday Nov. 0
FNMA- 32 DOM
Bank listing 56k. My first offer 47.5k. They countered 53.5. My finally offer was 50k. They accepted. Need 5-6k in repairs but I put aside 10k.(this is my first project) It can rent for 950$ on the low side, 1050$ on the high side.
Recent Short Sale: Listed $110K. Offered $80K. Accepted. Closed and now rented at $1,250. $80K private lender funded deal at 8%.
Taught my wife how to make offers and on the 1st house she looked it she got a short sale offer accepted at $60K. ARV is around $100K. Haven't decided if we are going to hold or sell it.
Have a private seller deal in escrow. Offered $80K. Wholesale buyer is paying $95K.
This is one of our deals in the past couple months. The REO Listing just fell out of escrow with the old buyer and we stepped in with an offer at 285k. Rehab costs were 35k. Had it back on the market in a month. Sold with multiple offers on the first weekend at $420k. No appraisal issues. Inspections done. Close next week. 3 month deal.
I agree that it is an interesting and helpful thread to understand what is going on in the current market. Of course every market/city is different but it gives you a good idea of what is flying with the major banks ,etc in terms of discount off list price.
It would also be interesting to know what terms are being accepted as well. I am assuming that most of these REOs are being bought cash or with hard money or transactional lender funds. But it would be interesting to get an idea of specifically what is working. Are the proof of funds letters from hard money or transactional lender funds working now, or are they asking for an actual bank statement from your bank showing a bank balance?
This might be off topic, but how are you guys getting these? I can't seem to get anything under contract. I've put in numerous bids but can't get a counter.
Are you guys upping the EM or removing the option period?
I offer $20,000 EMD and pay cash for the properties. We list closing in 30 days. We go in with zero contingencies.
If you are serious about the property why not put the $$ in the EMD?
... I can't seem to get anything under contract. I've put in numerous bids but can't get a counter.
Are you guys upping the EM or removing the option period?
You trying to use an "option" to purchase? There's your problem ...
REO properties will almost always require non-assignable contracts - no assignments, and no options. The banks want the property sold, not tied up while it's shopped around.
Sorry, when I say option I meant the "due diligence" period.
If your buying REOs you should already be buying the property for what it is.
Put yourself in the banks position. They have a toxic asset they want to unload to the buyer who is most likely to close. Low EMDs, contingencies and due diligence periods are a red flag to a problem closing.