Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
15y
This is what I see in my area...
For properties that have been on the market for less than a month, expect that you'd probably have to come in at about 90% of list price. After 3-6 months on the market (or month or two after a price drop), you may be able to get down to 80% of list.
This assumes, of course, that the property isn't a good deal, in which case it may go the first day above list price...
Real Estate Investor · Member since 2010 · 8 posts · 0 votes
15y
Originally posted by J Scott:
This assumes, of course, that the property isn't a good deal, in which case it may go the first day above list price...
I'm seeing this as well... you have to literally check the REO websites 2-3x per day b/c the really nice ones are going that fast and pay asking price.
Real Estate Investor · Orlando, FL · Member since 2009 · 39 posts · 7 votes
15y
Fantasm,
The best place for REO'S is the MLS.... Find an investor friendly Realtor and see if you can look together for REO's or if they can send you a list every week, and keep you up to date on price changes, and days on market.
Real Estate Investor · Williamson County, TX · Member since 2011 · 1k+ posts · 961 votes
14y
I am surprised at the answers here. I assumed there were huge problems for banks owning condos in Florida. Condo fees (holding costs) being one and financing for buyers being the other. "Warrantable" condos, which I believe is the term for condos banks will loan money on because they are conforming loans, require owner occupant rates, vacancy rates, complex has to be completely built out, etc... If the buyers have to pay cash, then the buyer pool shrinks considerably, I would assume. Maybe that is why the Fed is so insistant upon proping up Wall St.-- so investors can make money, cash out and buy Florida condos.
Involved In Real Estate · Boonton, NJ · Member since 2008 · 39 posts · 15 votes
14y
Most banks are listing the property lower than the guy down the street to be competetive, so it is already somewhat 'discounted'. Plus, condition is taken into account on the BPO and ultimately, the list price. If the property doesn't recieve any offers in the first few weeks, it is usually reduced every couple of weeks until a contract is procured. But too often investors 'wait it out' and miss it. They don't consider low balls. None of them do...'your offer has been submitted in writing and rejected'...I would say 20% below list is a good start for an offer, if you can end up somewhere in the middle.
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
14y
Originally posted by Ed Beck:
Most banks are listing the property lower than the guy down the street to be competetive, so it is already somewhat 'discounted'.
This is often not the case in my neck of the woods. These banks that list their porperties on the MLS are so damn greedy, they are consistently pricing their properties that are in less than perfect condition at the same price as the home down the street that was a standard sale with granite counter tops and a full remodel. It makes no sense, but they do it, so do not assume that because it is an REO that it is already priced at a discount - that is a typical rookie mistake.
As for the BPO's, they may, or may not take condition into account. They are typically only being paid $75 to $100 to perform a BPO, such a small fee usually has the agent cutting so many corners, they rarely perform enough due diligence to factor in the condition of the subject property compared to the comparables and I am willing to bet that none of them actually drive or look up the comps to check conditions, it is just not worth their time. As such, banks often send out their listings at prices too high. This is one of many factors why the spreads are so thin and competition so fierce.
Involved In Real Estate · Boonton, NJ · Member since 2008 · 39 posts · 15 votes
14y
"They are typically only being paid $75 to $100 to perform a BPO, such a small fee usually has the agent cutting so many corners, they rarely perform enough due diligence to factor in the condition of the subject property compared to the comparables and I am willing to bet that none of them actually drive or look up the comps to check conditions, it is just not worth their time. As such, banks often send out their listings at prices too high."
As a listing agent, I am not doing a BPO for $100, I'm doing it for the listing, and continued listings for many years to come. So, I'm not cutting corners, because if my BPO comes in too high, it sits on the market, with no activity. My client, the seller, the bank, wants to know why there hasn't been activity each month..."well, it's because I didn't take into consideration that there was no copper or boiler when I did my BPO, and I didn't research my comps" That's not going to get me too many more listings from that client. I send out accurate BPO's, with 'ballpark' repair figures (no, I'm not a contractor). REO agents that do not send out accurate BPO's lose business. To me.
Real Estate Consultant · Lansing, MI · Member since 2011 · 356 posts · 306 votes
14y
My experience has been similar; the good properties that are priced well go QUICKLY. If you find one that looks like a winner and it's been on the market for 3-4 months, I would say make a low offer and see what happens. There's nothing wrong with getting countered, but having your first offer accepted can be costly.
Residential Real Estate Agent · Costa Mesa, CA · Member since 2008 · 1k+ posts · 380 votes
14y
In my market, APRE has pretty good "market share" on the REO inventory that "needs work". They have an auto-reject if your offer is less than 80% of list, so I have clients that shotgun at 80% of list just to see what comes. Every now and again their offer is considered, and always met with a H&B. At which point, I try to have the phone conversation I mentioned in the other REO thread that everyone here is a part of.