An REO is a property that the bank owns. If it was a foreclosure the bank didn't pay anything for it. Where did you get this $795 figure?

The best thing to do is have your Agent talk with the listing Agent about status of the property and if there are other offers. You may also have your Agent ask the amount that the other offers are. Many miseducated Agents for some reason think it's unethical to ask this question and to answer it. It's a valid question and if the Agent answers it you can get some good information.

If you were my client I would speak to the Listing Agent, complete a comparative market analysis, and review your budget and other options you have in the market before helping you write an offer on this property. No Agent can tell you what to offer, but if there are 5 other offers at 50K above asking price, you should surmise that your offer should probably be as competative if not better.

Depending on the price point and the value of the home. We look up the assessed taxable value and make sure we do not pay more than the value. The banks tend to list the homes for less value to get a multiple bidding started. Consult an agent in your area.

There are alot of factors to this question. Where are you buying? Whats the market like? How many houses for sale are in the area? Whats the Short Sale/Foreclosure Ratio.

There are alot of things that go into this. I am an REO agent for Phoenix/Glendale/Scottsdale/Peoria/Surprise in Az and other surrounding areas. I am seeing A TON of activity on ALL of my properties. All of them are selling for above list price. As I am not speaking for all REO's but for my properties they are going under contract under 15-20 days W/ multiple offers at and above list price. Typically if it is a newer property the bank will not budge on the price. Must be clean and above what they are asking, if not they will either counter at full or reject. As I am seeing alot more buyers per house you are competing to get the house. My banks are wanting best and final offers submitted NO COUNTERS. If the property has been sitting for a little longer then the bank is more open to being flexible, as they have little or no activity on the property. I recommend getting in contact with the listing agent and seeing where the bank is.

Hi Regina,

Sorry to disagree with the Realtors from other states....but the San Diego market is on Fire. Your agent should do a CMA, but in most cases you will be offering above list price. The agent also needs to find out (if they can) how many offers the bank has. This will help you determine how much over (if at all) you need to offer.

You are more fortunate than others in San Diego that you are looking in that high of a price range. There is less competition in this range, so you may in fact get a deal

But remember that even if you pay $850K or above, the home was probably worth almost double that a few years ago.

Good Luck!! I hope you find your dream home.

Christa Borellini
01761296
Prudential California
Christab@prusd.com

I am in the process of a REO and we bid under asking price and got it it for 6,000 under list test the market

Hire a Realtor to represent you. Do comps to see if their asking price is in the ballpark. How long has it been on the market, condition and are they doing repairs or in "as is" condition. Base you offer on the facts. Good luck.

Hi Regina,
When you say the bank paid $795,000 - that may have been the amount of the lien they had on the property. The bank may have had to pay back property taxes, insurance and other expenses. Banks will have an apraisal of the property and try to get market value for the property. You and your Realtor can view the recent comparable sales in the neighborhoood, the active listings and decide on a price you would like to offer. Each property is different.

Under the asking price!!! Don't worry the bank will counteroffer; start where you feel comfortable.

When you say bid....is this an auction? Or are you placing an offer? The other folks are correct....hire a Realtor to help. They will supply comps and help you detrmine a fair price. Here are criteris that may make the bank take a lower offer:

Time on market
Condition of Home
Strength of offer
Will you use them as a lender?

Good luck!

Yes, I agree with the below. You would bid what you think would be a fair deal or a really good deal. I saw a foreclosure recently where the bank was asking $550K and took $450K! WOW. It really depends upon the location, the market values, who else is looking, and the loss mitigation specialist you are working with. The bank employees want to get as much for the property as they can, however they aren't in the business of owning houses either. I agree with finding yourself a good local realtor and getting their opinion as real estate is a local business.

Regina, when the property is REO, the bank is simply the new owner. Like any seller, they want to sell their property. The good news is they are more motivated to sell, have no desire to rent the property, are not emotionally attached and will accept a reasonable offer. They set their price at what their Realtor considers current value. If it doesn't sell, they reduce the price. It's not based on what they paid.

To buy an REO property, align yourself with your own Realtor who can evaluate the market, send you regular REO updates and negotiate on your behalf. Check out our REO site http://www.OCBankDeals.com. If you are not from Orange County, we can match you with a qualified REO expert in your area. Just let us know.

Hi Regina, Of course banks are in the business to make money. Much like any Seller they will price the home using the broker's opinion. Remember, this is the asking price not the price they might accept. In most cases, if you offer 3% below their asking price you will have a competitive offer. Using your Realtor to do a thorough analysis will help you determine the best ofer price. If you are more concerned with how much the bank profits...you are likely going to make a choice that is not pragmatic. Alwasy use factual data and trend information when purchasing Real Estate, regardless of ownership.

Michael
http://www.MichaelRobertsHomes.com