making offers on reos?
i've been told that on reo's banks normally don't take less than 20% of asking price and its a waste of time to go out and offer half of list or below even if the property has been sitting for 5 months to a year or more. is this a good rule to follow?
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Like the others have said, offer based on your requirements, not based on the listing price.
Of the 20 or so REOs I've purchased, at least a few have been at 30-40% below list price. Probably close to half of them have been at 50% or more below the original price where I first submitted my offer; for example, it may have been listed at $100K, I offered $50K, got rejected, the bank dropped the price to $70K, I resubmitted my offer, and then got it for $50K or less.
So, make the offer based on what it's worth. If your offer is rejected, submit again after the next price drop (or a couple weeks later). The worst that can happen is that your offer can get rejected.