Why do some houses don't sell right away?

Question

I'm sure this is an easy question for many, however I wanted too see what the answers would be. Currently on MLS their are about 20 house that were listed from the beginning of the month as REO. Now, does this mean that no investors are putting in offers cause they want too much, or do investors see it as not a good city, house to invest in and the numbers don't work?

Sarah Shockley · Answer

This is a very broad question, so I'll give you the very broad answer:
Because the price is too high.

There can be a lot of reasons why the price is too high - ie the property is not in good condition, not a good area of town, area values are declining, etc - but it all comes back to the price.

There are a few exceptions (but very few). For example, Fannie Mae Homepath properties do not allow investors to bid on a property for the first 15 days it's on the market - to allow owner-occupants a better chance of getting into a house.

Jon Holdman · Answer

If you have MLS access or an agent you work with, look up DOM (days on market) in your area and the price ranges of these houses.  Most houses listed on the MLS don't sell right away. DOM is typically several months.

Banks often list houses at fairly high prices compared to other properties and considering the work required.  I think they're hopping an owner/occupant will see them as a good deal and pay roughly market value less cost of repairs.  If it doesn't move, the bank will drop the price once a month or so.  The house will sell quickly once it hits the right price.

But I've also seen banks list properties at very good prices from the start.  I think in those cases, they're hoping for a bidding war.