Home Buying in Walnut Creek>Question Details

Cathlene Wht…, Home Buyer in Sacramento, CA

Why would a bank not reduce price on a foreclosed home that is vacant, is now bank owned, has had regular mo. price reductions over market, no offers

Asked by Cathlene Whtie, Sacramento, CA Thu Apr 10, 2014

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9
No point in wasting time trying to figure out why a bank does what they do. Nothing can be done to change it. Just send me an email if you have any further questions.

Alex Greer
Loan Officer
NMLS #1056079

http://www.TheMortgageOutlet.com
408-352-5147
AGreer@TheMortgageOutlet.com
1 vote Thank Flag Link Thu Apr 10, 2014
Hi Cathlene,

The banks establish the asking price based on appraisal or something called a Broker Price Opinion. If the initial estimates are out of whack with true market value it can take the bank a while to adapt. One successful strategy that I've used in the past is to submit a fair offer and also submit current comparable sales at the same time. That way the person on the other side of the negotiation has a better understanding of how you came up with your offer price.

Regards,
--Brian
925-400-7020
1 vote Thank Flag Link Thu Apr 10, 2014
Banks tend to price homes at whatever the market price is. They especially tend to avoid price reductions in California because they know there is great demand for homes in the area; there is a shortage of homes in comparison to buyers.
1 vote Thank Flag Link Thu Apr 10, 2014
Hello Cathlene,

That is a good question and I anticipate that this will become a frequent occurrence. My thoughts are that since home values are increasing, lenders don't feel that it is necessary to reduce the price anymore. I actually had a conversation with my mortgage broker about this. The days of homes selling for 35-50% below market value are in our rear view mirror. However, each situation is different so I wouldn't get discouraged.

Keith L. Bosworth
Realtor-Arise Realty
(650) 378-3852
keith@ariserealty.com
BRE#01920565
1 vote Thank Flag Link Thu Apr 10, 2014
Cathlene it is simple supply an demand. In most other states for everyone home buyer there are 5 to 7 homes available, here in California the ratio is 1.1 homes per buyer. With the high demand we have currently, low supply & also take into account how much money the banks have lost over this home being vacant & you can see why a bank will not reduce the price on a foreclosed home especially with high demand, low inventory. Feel free to give me a call if you would like, I'm a short sale foreclosure resource certified, also a platinum equator certified short sale and foreclosure agent & i also work for the banks as a BPO agent & foreclosure agent when the homes are foreclosed. Im a 2nd generations realtor that has been in real estate for over 10 years now. My number is (925) 389-8920 and if you have anymore questions just call me.
0 votes Thank Flag Link Fri Apr 11, 2014
This is a exceptionally effective means for selling the home at market value.
As you noted, the price is reduced monthly. The bank IS reducing the price.
At some point the price WILL be attractive to you.
That is good news.

The bad news is the price will have been good for someone else the previous month.
You will lose the house because someone else was willing to pay $10,000 more.

That is EXACTLY the way it is supposed to work.
It is very likely it will sell ABOVE the last published price.
0 votes Thank Flag Link Fri Apr 11, 2014
Some REO homes get grossly over priced from the start. The use of out of town appraisers and users willing to work for less ofren produce a value that is not realistic. The listing agent needs to be on top of it showing teh bank what that property is worth. they need to furnish showing updates in the form of numbers, comments and why no offers to get the price where it should be. Many banks will ask for price changes every 30 days.
0 votes Thank Flag Link Fri Apr 11, 2014
The foreclosure process requires lenders to have recent appraisals and or BPO's done on the targeted property. They therefore do have a good appreciation for the value of the property. In a recovering market, when home values are appreciating, owners(banks or otherwise) always seek to sell for the highest amount the market will withstand.

The fact that the bank/owner/seller is now regularly decreasing their asking price is also a common practice during the foreclosure selling process.

If this property is grossly overpriced, I would recommend seeking the support of an experienced local real estate professional that can help you understand the actual current value of the property and how best to proceed with making an offer that is defendable.

Good luck,

Bill
0 votes Thank Flag Link Fri Apr 11, 2014
The truth of the matter Cathlene is that the banks will always want to make as much money as they can. Sometime they will sit on them. This makes no sense to you and me but perfect sense to bankers and investors. With all that being said, please provide me the property address and I will be happy to investigate.

Furthermore, I see you are a Homebuyer. I have a special program that will help you save money and keep more money in your pocket during the purchase of your home. Its impossible to explain it on this forum, but feel free to call me and I will be happy to explain it to you.

Respectfully,

Eddie W. de Leon
951-210-2101
CA-BRE Broker 01393751
0 votes Thank Flag Link Fri Apr 11, 2014
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