Updated over 6 years ago on . Most recent reply
Foreclosure bid rejected without counter
My agent advices me that the bank rejected my $40 cash bid on a 1bed co-op , listed @56k. The bank did not counter because they felt the bid was to low. The property has been listed for 50+ days with one price drop. I decided to want any see if price drops before revisiting. Do I have a chance bidding in the future or have I upset the selling agent & bank? Any advice??
I reviewed comps between 2017-19 and 1 beds have sold between 35k - 57k.. 57k was most recent sale. Currently 2 beds are listed for 60k- 70k (over 150 days). It doesn't look like these units are moving fast, but rental market is hot in this area. Based on HOA cost I will have good cash flow and I have wording in the sales agreement that property must be approved by board for rental.
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Of course, you can bid again. If your bid was seen as too low, it won't be countered. It's important to know what the process looks like from the lenders' perspective: "The major lenders say they are not deliberately holding back any foreclosed homes. They say that a long sales process can stigmatize a property and ratchet up maintenance and other costs. But they also do not want to unload properties in a fire sale. That contributes to a downward spiral in market values. The goal is to not only recoup the loss but also to help stabilize communities."
Being on market for "50+ Days" is not a big issue; recent comps (180 days or less) are the ones used to value property so that $57k sale is most likely setting the mark. With the price point so low, the priority is most likely being given to first time home buyers as well.
Your best chance of winning a bid on foreclosures is to base your bid on current comparable sales (180 days or less) within a 1 mile radius. That is the appraisal model for determine property value in residential real estate.