The seller lists the home to generate the highest and best offer.
Buyers are out shopping for value.
Homes perceived as value will generate offers and when the seller and agent have priced it correctly it may generate multiple offers.
Buyers and/or their agents who are knowledgeable in the market will have an opinion of the value of that home, and offer accordingly.
Value includes location, condition, etcâ€¦
This is true of all properties, regardless if they are bank owned, short sale, or just a regular arms length transaction.
In Santa Clara county there are some "harder hit" areas when it comes to foreclosed homes. Los Gatos is not one of them... you can expect to run into a competitive situation every time a reo is a bit bellow market ( usually 5-8%) that will get the price right where it should be.
If you want to get a deeper discounts you'll have to work with someone that understands the distressed asset market and can guide you in the right direction.
I'm available Wed's and Thursdays ! :)
The conventional sales have most room for negotiation and easiest to deal. You are dealing with sellers and they are more interested to satisfy your needs. These sales also require more disclosures and providing buyers with inspection results.
In neighborhoods that do not often have foreclosed homes, it often attracts more attention and offers often exceed asked price. My experience in handling these sales is only homes needing repair get the most discount. You need a skilled reator who understand construction and can advise you on the defects and restoration cost. Your cost is sum of the total not what you saved with the bank. All bank owned properties are sold as is with minimum amount of disclosures or information
The conventional sales have most room for negotiation and easier to deal. They are required more disclosures and providing buyers with inspection results.
In neighborhoods that do not often have foreclosed homes, it attracts bargain hunters generating prices sold more than asked. My experience in handling these sales is only homes needing repair get the most discount. You need a skilled reator who can advise you on the defects and restoration cost.
All bank owned properties are sold as is with minimum amount of disclosures. .
My name is Allyson and I have been working mainly as an REO/Short Sale purchasing agent so here is the "scoop" as I see it.
1) All reo's are required by the bank before listing to have what is called a BPO ( Broker Priced Opinion ) this is like an Appraisal. One of the reason's for this is the bank is already taking a loss so they want to recover as MUCH as they can.
2) The reo listing agent usually wants to list it as low as possible for a quick sale. They are graded by the asset manager of the bank on how they perform. The accurate pricing and sales volume are just a few of the areas used in grading the reo agent. The higher the agent scores the more listings he is given by the asset manager.
3) The reo's are usually at the bottom end of the pricing for an area along with Short Sales, but remember the bank wants as much as possible so they will be priced close to what the going market is priced at.
4) there is NO average pricing discount for reo's, and if the reo is priced ridiculously low it is done ONLY to induce multiple offers which usually brings the selling price close to what the other homes are selling at.
5) Most usually when an reo listing agent wants a price reduction he needs to do a new BPO to justify this.
6) So are they discounted? I'd say usually, BUT remember most all of them need at least some work done on them, so there is that to consider, ( usually you can negotiate price/ or once your offer is accepted and you find some significant damage that also can be negotiated )
So to sum it up do I think they are good deals? YES , but as CJ pointed out sometimes regular sales can be just as good given a very motivated seller.
If you have any additional questions or would like to just talk about this feel free to contact me I am always happy to help.
This really depends on each particular property; however, to give you an idea, I have been successful in negotiating price reductions in sales price down to a high of 96.5% and to a low of 77.75% of intial list price.
Long and Foster Real Estate Inc.