Home Buying in 95403>Question Details

Lray, Home Buyer in California

in santa rosa ca looking at a reo property for 299k want to offer 270k is that resonable

Asked by Lray, California Mon May 19, 2008

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It all depends. In certain areas of Santa Rosa the $299,000 price might be $50,000-100,000 below the marekt price. The Assett Manager and his Realtor/Licensee have made a marketing decision to get it way below the market to be percieved as a super-deal--hence, buyers/agents drive up the price. We've been seeing these shennanigans with comments in the confidential remarks section saying, "20 offers now on the table--don't bother submitting any offer under $350,000" and the property is listed for $259,000!!
The issues we have with "Short-Sales" and REO's is the public percieves them as desperate sellers. I got news for you, assett managers once they get it back are NOT pushovers!! And Short-Sale folks? It's totally contingent upon lender approval so what do THEY care about pricing? Buyers think they can come in and get a killer deal--not happening in this county. Sure, you're getting prices at 30-50% off from just 3 eyars ago but since Buyer's have little historical context they all want "more"!! . Folks like yourself, without any representation of a local, savvy Realtor/Licensee troll through the internet and see prices, do a Zillow search and tell their agent, since they are a buyer and they've all heard this is a BUYER'S market, they want to offer LESS!! I'm writing an offer on an REO in a property on the Eastside of Santa Rosa and I've been setting my buyer's expectations, sharingn with them the market realities, showing them the different neighborhoods and HE asked how much do we need to go over to get this!
On the flip side, if the area has truly cratered and the $299,000 is HIGH for that area then by all means offer less. But to careful of the blanket pricing strategy so inherent in watching late night TV or listening to the latest foreclosure guru!!
1 vote Thank Flag Link Tue May 20, 2008
Hi Lray,
There are two houses you could be talking about and their situations are quite different. I'll let you track down a real estate agent of your own to help you make decisions on those particular houses, but I can talk about the market in general. This is what the statistics say:

REO homes in Santa Rosa that sell quickly and are priced below 300K have been selling ABOVE listing price recently.

If a home is on the market for 0-30 days it has averaged 101.86% of listing price. From 30-60 days, 102.6 percent. There are some statistical blips for lower prices after 60 days, but at 91-120 days the price is still around 100% of listing. That doesn't mean intermediate price drops may not have been made to get ot the final listing price, so the 300K final listing price home may have started at 350K or higher. In any case, there is growing agreement that bargain hunters are back in the market for the REO listings. We can tell that by the fact that multiple offers and overbidding are once again part of the real estate world in Sonoma County.

It doesn't hurt to put in a low-ball offer, but these statistics should help you understand the market is strong in that range and you may not get the house you want.

The other factor you need to consider is how strong and well documented your offer will be. Loans can be hard to obtain and most transactions require substantial down payments. You should be working with a lender and a real estate agent so that when you finally decide to jump into the market you have everything you need. I know you would hate to lose a house because you couldn't find an old tax return or a W-2, but I've seen it happen. If you are getting serious about starting to put offers in on houses, you should start working with someone who can write offers for you and help with the sometimes complicated process. It doesn't cost you a dime to have your own agent. All the fees are paid by the seller.
0 votes Thank Flag Link Mon May 19, 2008
have you been inside the house yet or are you making this offer based on the asking price and drive by? I see there are only 2 houses in 95403 that are listed at $299 and both are short sales. Are you looking at the one with the 4bedroom or the one with 3bedrooms? Contact me off list if its the 4bedroom because I have some information that could be of value to your decision making on this purchase.

Mario Bertacco, Broker
SoCo Real Estate, Inc
0 votes Thank Flag Link Mon May 19, 2008
It would depend on the comps for the area. If it is priced at market I would say go for it,. But if priced below market the banks could be trying the strategy of bidding up. So you need to consult witha professional who can help with finding out the market value

If you have any questions feel free to drop me a line.
Kind Regards
Michael Barron
First Team Real Estate
0 votes Thank Flag Link Mon May 19, 2008
Sounds reasonable at the outset -- yet, it would depend on:
1. is it priced 'below market' to attract offers with the likelihood that it could be 'bid up?"
2. How long has it been on the market?
3. What do the comparable closed sales and active listings tell you about its value?
4. is $270K reasonable for YOU -- that is, is that what you can comfortably afford to offer and pay? If so, then definitely you should submit your offer and just see if it flies. The worst that can happen is it won't be accepted!
Right now properties under $300K in Santa Rosa are flying out the door if they are priced well. REO listings are often receiving multiple offers. Yet, without knowing the exact property you're referring to it is hard to counsel you concretely about how to proceed.
In any case i wish you the best in your attempt and hope my comments help.
Susan Bryer
0 votes Thank Flag Link Mon May 19, 2008
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