Six month fixed price on an REO?

4 Replies

There is a foreclosure that has been on the market for four and a half months. It has been under contract twice and then fallen through, with the listing price lowered once about six weeks ago. The selling agent has explained that the property may only sell for the non-negotiable list price for six months. After that it can go to a more marketable price and can be negotiated like a normal sale. Has anyone else run into this? 

@Amie D. I would still submit an offer and see what happens. Banks do BPOs before properties get listed and they have a good idea of what they want to sell it for. I wouldn't wait 6 months to see if the price is lowered I would submit an offer now and start negotiating. I've bought foreclosures before and the worst they can say is no or counter your offer. Good luck!

Sounds like this is a Reverse Mtg REO. Yes, this is true, a requirement from FHA which insured the loan, quite common.

BTW, that fixed minimum price is 95% of a current FHA appraisal.

Originally posted by @Wayne Brooks :

BTW, that fixed minimum price is 95% of a current FHA appraisal.

Wayne I thought I'd heard of this with a reverse mortgage foreclosure before. So if the fixed minimum is 95% of a current FHA appraisal - then the list price for this house is probably be set at this level? The selling agent said that he would have sold this house ten times over already if not for this rule.

At the six month point, do they usually lower the price again, and are you then usually fighting with a flurry of other investors? (Seller’s market here.) Thanks!

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