REO on market for 170 days +. The price has been incrementally dropped. Now there is a status change with the price higher than the last price drop by about 10K. Is this the bank's call to increase and why would they when clearly no one is buying it at the price it was last listed at?
The bank owns it, so they can set whatever price they'd like. Banks + Real Estate = weird combo and strange behavior.
What was the status change?
Keep hounding them with the price you are willing to pay for the place and they'll either come around, or they won't. I wouldn't waste too much time second guessing their price strategy.
That could actually be a fun game here on BP: What was the bank thinking!! @Brandon Turner ...
With 99% certainty I'll give you the answer. The property sat on the market for too long and it caused the AM to deal with a new appraisal. That appraisal came in higher which kicked the sales price up to a new price in their matrix.
It sounds like you are talking about a HUD being 170+ days (they do it at 180).
Leigh is correct with a good simplified version! REO/ORE properties are exposed to the market at what is deemed it's highest price to payoff debt and obtain any equity for the borrower as required. After exposer the book value is automatically written down and price is reduced. At 6 months the market is revaluated and the process begins again, after one year it will be written down until it sells as banks can't hold REO/ORE as banks may not speculate in RE. Laws keep banks out of the real estate holding business and dictates disposal. They may only hold bank "Owned RE". Two categories of property in a bank, "owned RE" which is the bank buildings for operations, the other is "other real estate (ORE)" or "real estate owned/other (REO)" the popular term for banks speaking on the public side is REO real estate owned, but it's other real estate to them.
You'll see prices adjusted as well if a property must be repaired, usually uninsured damages just go "as is" insured damages can be repaired or proceeds retained and offset the balance owing and marketed "as is".
When a borrower has more than one property pledged and other collateral is sold, it reduces the debt and remaining collateral may be adjusted as well.
Probably why investors can't make heads or tails of pricing of other RE is due to the regulatory requirements as it has more to do with book value than the market value of the property. Real estate is not a profit center in banking, the loans are. :)
Bill Gulley, General Real Estate Academy | https://generalrealestateacademy.com
It has been on for 171 days. List was originally 99,900 then went to 76,000 now 82,900 (@Aaron Montague change was listed as "Other" and it was done 2 days ago). This place is a total gut job. Offers have been going into some site - not an auction site but a site that assures that all offers are received and sent to the listing agent. I spoke with the agent a few weeks ago when I went to see the house because there was a squatter in it and subsequently I didn't get to see anything above or below the main floor. He says he knows it's in terrible shape and there have been multiple investor-type bids. @Bill Gulley
must HUDS be listed on the hudhomestore because if they do, this property is not.
If it's been on the market for that long, then make your offer. Even if it's only 30k or whatever works for you. I have several REOs at deep discounts to the list price - especially after they have been on the market for so long. Also, if you make your offer and they counter offer back without coming down much, then you need to keep on making counter offers until they either get to a number that you are happy with, or until they "reject" your offer.
@Bryan L - that's exactly what I'm going to do. Since it's on this submission website, it's also super easy to do.
Are REOs listed on individual banks' sites? Or is it just on Homepath? thanks!
this particular one is on the MLS.
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