or what the previous buyer paid for it. A local realtor can help you with a current assessment.
Then make an offer based upon what you as a buyer are comfortable with. In this Market
look for a great buy. Depending on whether you'll be using this as a principal Residence or
investment property and how much you want this house versus others can make a difference
on your offer price.
Our recommendation is to check the recently "sold" comps for similar property sold within the last 4-6 months. This information will give you an idea of what the bank will be considering when it reviews the offers. It will clarify your possible initial offer as well as your best price.
One thing about REOs that hasn't been mentioned below is that there may also be an outstanding tax liability. Most lenders selling their REO properties put that cost onto the buyers in addition to the purchase price.
It's the highest priced property, there may be taxes due, and so I would suggest you move onto some other property.
Most importantly, you need to talk with a Realtor familiar with the area in which you are looking. They will be able to find out more information on this home, and anything else available
Century 21 Scheetz
There are many factors to consider when trying to formulate an offer on a REO property. You have laid out some of the specifics of the situation but each transaction is unique and needs to be examined as such. Banks tend to like clean offers with as few contingencies as possible.
Things to consider:
Is it move in ready or does it need work?
Are you going to be asking for additional concessions from the seller in your offer?
Type of offer ie. cash or is financing going to be involved?
Are there ANY recent sales comps to support their asking price?
What is the property's true value in todays market?
How bad do you want the property and what are your intentions with it ie: owner occupant or investment?
Obviously they are already taking a financial hit hit if they bought if for $145k not too long ago and are now asking $125K. I would suggest having an agent in your area that is experienced in dealing with REO's on the buyer side assist you with formulating an offer. When it comes down to it, it really depends on your own comfort level. Worst case scenario, if you come in too low they will either counter or reject the offer. If they reject then resubmit a higher offer.