Kginqt13-Thanks for answering back. It sounds like you've done all your homework. I would still say if that is the highest you were comfortable offering, given the known repairs, then you've done all that is within your reasonable means.

Hopefully, you will get this home. Depending on the soundness of the offers, you will have a good chance. If someone offers more, but is putting little/no money down, then you have a better chance. If someone has offered more than you, and they have a significant down payment, then the bank may take that bet.

The most important thing is to continue to remove yourself emotionally from the offer/transaction until you get a contract on a home and get it closed. Be cautious not to get your heart set on a home and it will help you make more sound and sensible offers. If it's not at the right price for you, it's not the right home for you.

Please do check back in and let us know how it went.

I hope it comes through for you!

Have a great day!

Angela,
Yes I do have an agent and yes I have seen the comparables in the area. I agree with the fact that my best and highest offer was at the top of the lift for higher offers in the area minus work that needs to be done. They were asking $145,000 in the comparibles. Today was the day for the offer to be submitted and we got it in yesterday.

Yes there is also a agent that listed the property.

Kginqt13 -Sometimes when a property "pops up" as back on the market, people swarm. That may have put you in a multiple offer situation. Your highest and best is still the max you are able and willing to pay. You haven't mentioned whether you have an agent assisting you. No condemnation if you don't. But I would advise you if you have pinpointed this home as a "have to have" then you owe it to yourself to get the "SOLDS" data for that neighborhood. I'm not out to sell you a Realtor I promise!

Did they give you a deadline of when "Highest and Best Offer" must be in? Usually they will give one. If you have time and believe the value supports it, you can simply resubmit at a higher offer price. If you missed the deadline, then it's out of your hands.

Is there an agent listing this property? Or are you submitting directly to the bank that owns it?

The house has been on the market a year, then they recieved a offer and was about to go into closing and the people that were buying could not get financing so here it is again. Just re-activated about 1 month ago.

Depends on how long it's been on the market & if it is priced well for its current condition. Your Realtor should be able to guide you.

emilyknell1@yahoo.com

Thanks guys for all the answers.

This home will be my primary resitance and no this is not a short sale home its bank owned.

Kginqt13 -Grace and Lori gave excellent answers with regard to comparables.

In our market in the Austin, TX area, REO's are not always priced below market to attract more buyers. They may be a little below market, and if they sit for awhile without selling, then the price may drop some. But they are not always significant values. It also varies greatly as to the bank that owns the property, the condition, and how they are trying to meet their bottom line. You can find some good deals, but the "steals" are few and far between in our market.

You didn't mention whether this is an investment attempt for you or you are trying to obtain it as your residence. The two only differ nominally.

If it is an investment, to fix and resell, then when working with your Realtor (if you have one) you know by the comparables what you can most likely resell the home for in it's repaired state. If it is an investment as a rental property, you know by using the comparable data on the home you are selling AND the rentals in that area, whether it will lease for enough to cover mortgage plus repairs.

The other scenario is if it is to be your residence. Then you should consider your comparables. Will the purchase price, plus the cost of repairs be higher than what properties have sold for in that neighborhood?

With either purpose, this one fact is true. You really should not be concerned with other offers. You have YOUR bottom line. What you are willing to pay for it with repairs is your bottom line. People often get so anxious that there are other offers on the table. You should have your own strategy which as nothing to do with the other offers. You are willing to pay "X" for that particular home.

Of course, if you are the only offer, you may consider offering less than if you are in a multiple offer situation. However, your highest and best should have been a number you knew before you found out there were other offers. By that I mean, when you submitted your initial offer, you should have been expecting a counter offer or an acceptance. You should be looking at what's your "walk number". That's the number that says "if I can get it for "X" I'll buy it. Any higher and I will go on to the next property.

If it is not that home, then it may be the next. Be willing to go to the next if it is a deal you are looking for.

Best wishes!

Hi,
You always want to have a good idea of what the homes in the neighborhood would sell for in good condition and deduct from their if there are any repairs. That will tell you if the list price is fair. Just because the property is a bank foreclosure doesn't mean they will automatically take considerably less for the home.

If the bank is asking for highest and best, it means there are multiple offers on the property. I always tell my clients to offer as high as they are financially comfortable offering (based on the CMA of the neighborhood) BUT, that they would feel completely OK walking away from if their offer wasn't accepted.

And, just an FYI, REO properties are bank foreclosures and not short sales. Two totally different animals in the real estate world.

Welcome to the jungle! I have personally bought and sold nearly 70 + foreclosure and rehab properties. I got out of that business due to the fact I could buy a reasonably priced resale home that was a better deal than the unkowns of a short sale, or foreclosure. If the prior owners could not make their payment, what else did they forego in the maintenance of their home. In this age of disclosure, you are buying a lot of potential unseen headaches. Mold, Asbestos, Radon, frozen pipes etc. I might add that the banks are running open auctions with no end in sight taking multiple offers, and then telling all offerees to give them their highest and best offer! Many buyers of these properties after thousands of dollars spent are finding that the short sale or foreclosure was no deal at all!.. Good Luck!

You definately need a cma. The last contract I wrote for a buyer we were also in a multiple offer situation on a bank owned property. We beat out a cash offer by less than $5k. The fact that my clients were getting a loan did not make as much difference as we thought it would and we were pleasantly surprised when our offer won.

Hello Kginqt13 and thanks for your post.

Typically, the list price for an REO home is set below market for the area to attract a large number of potential buyers. Thus, if the comparable prices for the area are less than $153K or at $138K, you still have a good chance of getting the home. However, if similar properties in the area are selling for $170K or $180K, then a price of $138K may be, as you suggest, a bit too low even if it is a cash offer.

The best thing to do is to work with your Realtor in determining a fair price for the property based on comparables for the neighborhood. You should also factor into this equation how badly you wish to own this home. If you're just looking for a bargain, then I'd hold at $138K. However, if you really like this home and would be sorry to see it sold to someone else, you might up the price a little.

By the way, although you price is almost 10 percent less than listing, unless there are huge numbers of buyers for this home or in the area, you still stand a good chance of getting the home. I've certainly seen buyers offer less, but all cash, and get the property. Everything depends on number of buyers, demand and comparable prices in the area.

Good luck!!

Sincerely,
Grace Morioka, SRES, e-Pro
Area Pro Realty
San Jose, CA

Dear Home Buyer,
Before putting an offer in on a Short Sale with a "Best and Highest" request you should have had your agent perform a CMA and also put together a cost list of repairs. The Plainfield Short Sale market is VERY active and I am seeing quite a few Short Sales being sold over list price. But the most important thing is to have your agent do their homework so that you know what the true value of that property is today. I would be more than happy to put together a quck CMA if your agent has not done so for you.
Larry Ulfig
630-215-4718

I advise my clients that are considering purchasing a REO property to always submit their offers at their highest and best price. Many of these turn into multiple offer situations and sometimes you are not given a second chance. But on the other side of that, some lenders are looking at who is buying the home, will it be owner occupied or will it be an investment property and they may go with an lower owner occupied offer to get someone into that home that will develop roots in that community. If you have taken all the work into consideration and you feel it is a fair price for the home, you did the right thing. Just remember there will be another one if this one doesn't work out, you can't get attached until you know if it yours.

I think you should contact your agent right away to review your concerns. In addition to looking at the comparable sales, you can take a look at the active market activity as another measure. In either case, time is of the essence and you should talk with your agent.