If the bank put the house up for what they paid for it buyers will bid the house up to what a willing buyer will want to pay for the property and that will be much higher than 350K. The bank is a business and will look to make money on this if possible.
When the bank took the property back there were probably back property taxes and other issues (costs) it had to pay to straighten out Title. The bank has much more than $350k in the property.
The short answer is that they are asking $180k over what they got it back at the TD sale because they can start the asking price where ever they want.
The bank has already hired a couple of brokers to do a BPO (Broker Price Opinion) and that is most likely how they set the price. I just did a BPO for a bank last week and in the BPO they ask for a pricing strategy.
Bonnie gave you some solid information. Many buyers are getting hung up on wanting only foreclosures, REO's etc. (what they think is a good deal) and low short pay list prices (to draw offers) are confusing buyers, but like she mentioned the bottom line is WHO IS MORE MOTIVATED? Banks often are market priced or a tad lower, but not as motivated sometimes as a regular seller who is on a time line for a new job out of state, or trying to beat foreclosure on their home, and trying to save their credit.
As she also mentioned, sometimes some seller costs fall on the buyer (even though all is negotiable). Remember, often the seller pays for termite, so if you can find a motivated seller, that will pay some expenses and is motivated, well hey you just might be on to something!
A great example of this is 2 properties in the same area, both about 440k. The properties are night and day. One house a few of us agents walked out of and thought, wow, dated and severly over priced, (maybe, but I have not totally researched it, they maybe heading to foreclosure). The other we thought, wow, newer, very clean w/some wood flooring and a pebble tech pool! Just about 10-15k difference in price, with an extreme range of condition.
This is why it is important to obtain a local agent, and to be open to the good information they provide. Make the educated decision based on local data, not the emotional decision or the .."they paid this for it" that probably will not apply to your transaction. Plus, beware of national home statistics, real estate is local, this has been a huge problem too for buyers.
I have a booth at an event coming up in the near future and it will be very interesting to hear what home owners will have to say this year. The last few years many boasted about their equity, well now that that is gone for many, it will be interesting conversation that I am looking forward to. In addition, knowing all will want foreclosure data, and having to explain this over and over, maybe I will have to refer them to Trulia and your great question.
Hope to do business with you in the future Bonnie. Good luck Sabine!
Serving Antelope Valley, Santa Clarita Valley and Ventura County,
I would love to research this for you to give you the correct answer. What is the address of the property? You can emai it to me if you'd like at firstname.lastname@example.org
I currently have several foreclosure listings myself in the Ventura County area. There are a lot of great deals out there.
There could be a few reasons for the difference in price but I'd like to let you know exactly what happened on the particular property in question.
Your question reminds me of how my father-in-law used to try and buy a property. He always wanted to know what the owner paid for the property (people still ask this now). Really, what does it matter if the Seller was an orginal buyer in 1960 he isnt going to be in a position to desire less for the homes sale price. He probably has more emotional attachment to his kitchen cabinets that he loved when he remodelled them....15 years ago. Also, in this go around of foreclosures, there are a lot of people who owned their home a long time and overstepped their safe borrowing practices that are in foreclosure so, what they paid has very litle relevance.
Basically, what I recommend, look at everything in your criteria and price range within 15-20%. Sometimes the REO Seller is not the most motivated. Think about it this way, who is most motivated? The couple selling their home to go join the kids and grandkids in Colorado OR the guy who is pushing the properties file across his desk, knows that his numbers wont look good to his boss if his percentage of sale to asking price is low and goes home at the end of the night to his own life. So, my advice, look at everything within a certain percentage and dont get hung up on the data.
I would recommend you have a Pest Control/Termite Inspection done on the property prior to submitting an offer. The REO lender will not generally pay for the termite work, but you can ask for a credit or bake it into your offer. I can refer you to a termite inspector (local) that will bill his inspection to escrow -- so no out-of-pocket expenses to you. Bottom line... Any property you write an offer on better include a 10% anticipation in further price declines and remember YOU determine the final price you are willing to pay. I suggest you ignore the "sticker" price in today's uncertain market. Good luck!