Will bank usually counter first offer?

Question

Does anyone have experience with Countrywide buying foreclosures? Asking because I want to know if the bank will counter an offer I submit on a foreclosure? Or at this time are they too busy? I realtor "friend" told me if I didn;tof 80% - forget about a counter? Is there a genral rule of thumb here? IF not, I want to submit at 65% asking price.

thanks

Jon Holdman · Answer

There's another thread on the BofA acquisition of Countrywide.  Please post followups on that topic on the other thread:
http://forums.biggerpockets.com/viewtopic.php?t=15519

Jon

Account Closed · Answer

Does anyone have an opinion regarding the purchase of Countrywide by Bank oif america? How might that affect the REO and short sales of thieir loans?

Account Closed · Answer

I think it's fun to see the reaction to some of the listing agents on the lowball offers we have made recently.  One little house was listed at $29,000, we ran our numbers and came up with a starting offer of $9,000.  You should have heard the agent.  She acted like we just personally insulted her!  It was great!  The bank didn't even respond.  The house is now listed at $24,000 and in 30 more  days when it is listed at $19,000 I'll throw out a $10,000 offer and probably get it.

Brian Ristola · Answer

It would certainly make sense that they are willing to take significantly less than their asking.  They drop their prices when they need to move inventory, like other businesses.

One REO (two family dump) in my town was listed at $138K this summer. It is at $85K currently.

Marc NA · Answer

stick with numbers that work for you and do not worry about their own counter offers. At the end of the day, you have to be prepared with the numbers that work for you no matter what just move on. Be poilite about it.

Chris Montgomery · Answer

I've been able to purchase a few REOs from Countrywide.  On one of the properties they accepted my offer without a counter which was at 70% of their list price.  In other cases I've had countrywide reject an offer that was at 80% of list without a counter.  It often seems to have as much to do with the listing agent or asset manager as it does with the bank.  On the ones I've purchased I think the reasons they accepted the lower offer  were related to time on market, condition of the property and perhaps the fact that it as a cash offer that would close before the end of the year.  I haven't seen one hard and fast rule for Countrywide as an organization.

I realize that's a lot of variables, but it comes down to what has been said above - make an offer that works for you on the specific piece of property and see what happens.

Jim Watkins · Answer

I have not been able to successfully deal with Countrywide. I have even taken the time to personally go to their massive building in Plano, Texas but to date, have never found them to be easy to bargain with.

BUT... I have been hearing from other local investors that Countrywide has recently agreed to several short sales with them. That is incredible to hear that. 
I guess even the mighty Countrywide is feeling the pain. I never thought I would live long enough to see Countrywide make a deal.

Everyone who has commented thus far are all correct. You have NOTHING to lose by making an offer.
But..... BE SURE you can make good on any offer you make. I say this because the lenders that I have talked with "off the record" have all told me they are leery of investors because a lot of them have not been able to follow through and buy the house after their offer was accepted.
They have also told me that once an investor closes on a house after an offer was accepted, they tend to cut right to the chase with them in the future as they know they will do as they say.

Mike S · Answer

Expect not much of a change. Banks don't like giving up money.

Tracy Harmon · Answer

A lot of realtors are still in denial about plummeting home values.  Doing BPOs I see some interesting things.  One house I looked at recently while doing comps had been sold by a lender to another lender in Sept for $639k and is currently on the market for $439k.  I'd feel free to offer just about any offer, the worst thing they can say is no.

Alexis Dedrickson · Answer

I agree. Be agressive, and never back down from them. If they don't accept what you want to pay, move on and find another deal. Sometimes they even come back to you and beg you to buy it! You want them to counter, because if they don't, you offered too much :)