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?
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
16y
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.
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
16y
In my experience, and like Steve said, listing agents generally want a full P&S agreement, and often times will ask for a specific P&S that already has certain items filled in and certain stipulations attached.
While I've VERY OCCASIONALLY gotten listing agents to accept a verbal offer (on properties that have been on the market for a long time), I don't know many listing agents who will generally submit an offer to the buyer on anything other than their standard P&S.
One piece of advice: For my offers, 95% of the offer is the same for every one (closing costs, due diligence, stipulations, material relationship disclosure, etc), so I have a saved copy of the P&S and I just change a couple numbers on each contract before I submit it (specifically, the purchase price and the earnest money amount).
In fact, I even have a blank check that I copy and fill in right on the copy as my POF. So, I don't even have to waste more than one check on a POF for all my offers.
Generally, I can write up and submit an offer in about 5 minutes...