If you have a Realtor that specializes in finding the Bank Owned listings that have been on the market the longest period of time, you can probably get a better bargain. The MLS system allows a Realtor/agent to send you the newest listings of the type of property and location you are interested in.
I think the problem is that many people are looking for bargains, so there are lots of customers receiving notices of these "new" bank owned homes from their agents. This situation creates the multiple offers that Roberta talked about and competition also usually creates a higher price for the property.
By finding the longest listed properties (ones that may be off the radar screen so to speak), you might just find a bargain. I always recommend knowing the numbers in the area you are interested in ( median/average list and sale prices, time on market, months of inventory etc.) This information is available at http://www.sandicor.com/statistics.html . I can refer a Realtor foreclosure specialist if you need one. I also have a cover sheet I developed to submit with your offer and will forward it to you if you want it. It is in the "word" format so you can modify to suit your particular situation.
1. How long has it been on the market
2. If the price was reduced before, what was the original price, and how often has it been reduced since?
3. What do the comps in the area show?
One of my clients insisted on a very lowball offer on an REO even though there were two other offers submitted at the same time. We were countered, but my client refused to budge. Although the terms of our offer were strongest (30% down), the bank chose another buyer who bid $10K higher than our offer, but was $20K less than list price. It would have been a great buy at $730K for a home that less than two years ago sold for $1.25M.
Now, we're in counter offer stage on another property, competing with three other bidders. The bank wants full price.
We're also experiencing a more rapid movement among REO properties that are aggressively priced wherein there are --- GASP! ---- multiple offers!
Find yourself an aggressive and resourceful REALTOR who is very knowledgeable in the area where you choose to buy and is experienced with REOs. You'll be glad you did. If you need assistance in finding such a REALTOR, let me know and I'll be happy to refer someone to you.
510 748 1148 office
On the flipside it can be lower too. It really depends on a varierty of factors. If you can find out more by working with an experienced agent. Do not be afraid of making offers, all they can say is no
Hope this helps
First Team Real Estate
All listings are open to offers, and I would not be afraid to make a lower offer or ask for closing cost assistance. First, though, it might be wise to take the "temperature" of the listing (or have your agent do that for you) to see what buyer activity is swirling around the home.
Often, foreclosed properties in San Diego will be listed far below market value and multiple offers will drive the price back up to market range. That can be frustrating for both buyers and agents.
Whether there is lots of activity or none, I would encourage you to offer what makes sense to you. This is the market buyers have been waiting for and everything is aligned in your favor (see article below).
All good wishes!
Villa Sotheby's International Realty