REO Price Drop During Best and Final.. huh?

Question

Three weeks ago we put a 45K offer on a SFH REO (could be flip or B&H) that was listed at 64K and had been sitting on the market for around 90 days. Just heard back from the bank that there are multiple offers and they are looking for best and final. As we are going over our numbers and formulating our response I get a Zillow notification that the property has had a price drop to $49K... huh?

Is this common? Is this one hand of the REO process and the other not knowing what they are doing or is this some kind of strategy that the banks employ? I'm honestly scratching my head over here.

Is this common?  Is this one hand of the REO process and the other not knowing what they are doing or is this some kind of strategy that the banks employ?  I'm honestly scratching my head over here.

Jaron Walling · Answer

@Ryan Hill In my experience the bank asked for the "best and final" offer. My realtor told there could be multiple offers... It felt like a lie or inexperience on her part. The property was sitting for 90+ days. I think it's a tactic used by the banks. List price was $99k, I offered $74k, they dropped to $92k, I countered to $79k, they went to $90k, I WALKED.

Ryan Hill · Answer

Do asset managers ever ask for “best and final”  as a tactic to increase an offer if I am the only offer they received?  I offered an  86% cash offer no contingencies.  They didn’t give a deadline.  My realtor is not the broker and they do not know one another.  The broker does know I am an investor and not been in the house and only walked the perimeter.  The house had been sitting 30 days and prior to making my offer yesterday  he informed my realtor no other offers had been submitted.  I received the request for a best and final today

Derek Montes · Answer

In the case of an asset manager, there are two reasons why we do this: lower the list price so we can accept a low ball offer and/or decrease price to create a bidding war. Good luck.