That's hard to say. Is this a new listing or has it been sitting a while? If it's new, banks sometimes base a price on what they want to recover and sometimes based on a BPO (Broker's Price Opinion). The smartest thing is to have your agent pull comps and evaluate the property so you can have a good sense of the true market value. Once you have that, you then need to determine your walk-away price so your initial offer is realistic and aggressive if need be. Your realtor is there to help you with your offer strategy.
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Difficult to say, your best bet will be to have a local agent research the home, the neighborhood and the bank, and to do it right away. Some lenders do use that strategy, low offering price and selling it to the highest bidder, but without working in the area and knowing all the details itâ€™s impossible to say.
If you're working with a great agent, they will quickly know the answer to your question and be in position to advise you the best way to move forward. If you need a referral to a good agent, I may know one. Best of luck.
A CMA will tell you right away what a reasonable starting point for you to bid is. If the bank did underprice it to drive a bidding war, they are well entitled to that strategy. It may or not work for the bank, what if you end up being the only offer? On the other hand if you do end up in a bidding war, you need to be able to know when to walk away.
As others stated if this is a good property at a good price it may bring many offers. If it was just listed they will most likely take owner occupied offers for the first 10-14 days. This is especially true if it is a Fanny Mae or Freddi Mac owned home.
Find yourself an agent that has worked with these type of properties. They will have a good idea of how the market for REO's is in your area.
One thing is certain....the bank will try to get as much for the property as the market will support. If this home is new to the market and desirable, it's hard to tell what the final price will be. On the other hand, if the property has been on the market for an extended period of time, and you can demonstrate a justified lower price, you may be successful in negotiating the price downward.
Typically, the listing prices for foreclosed property is determined by appraisals or BPO or a combination of the two. If there is multiple interest, it's common for the bank to invite interested parties to submit their "highest and best offer" on the home. This information will be used to determine their buyer. This doesn't necessarily mean the highest offer always gets the property. Buyer contingencies and cash compared to financed offers can play a big part in the decision. Lower cash offers have been known to win out over higher financed opportunities.
Your best bet is to work with a real estate professional that will represent your best interests...avoid working with the listing agent.