The absolutely best advice I can give you is to find a realtor with actual and extensive experience working with REO buyers and do what they tell you to do.
The Price you offer on any property Reo, Short Sale or even a Traditional Equity sale should be based on what comparable properties have been sold for recently. It doesnâ€™t matter what the owners paid for it, how much money they want from it the true value is based on the Comparable sales.
That being said the Banks have researched the market and have an educated Idea as to the properties current value. This estimate is based on a â€œBPOâ€, a brokerâ€™s price opinionâ€, A BPO, is an opinion from an independent Realtor that is only looking to estimate the asking price for the Bank.
Your agent should complete a Comparative Market analysis to assist you determine what YOU Feel is an accurate price for the property. You can offer any price you feel comfortable with, but remember the Bank is expecting a reasonable offer.
You will be required to have an appraisal from your lender, if you are getting a loan. Should you appraisal be lower that the price you offered you will have the opportunity to either cancel your offer are renegotiate the price. Remember your lender will not allow you to finance a home that is not worth what they are lending you.
Regina I hope this helps. This process is confusing and this is one of the areas where a Realtor can truly help you get the home of your dreams. If I can be of any assistance please feel free to contact me through my web site http://jimstinnett.prudentialcal.com
Prudential Ca Realty
You should have your agent analysis the comparable recent sales in the area. This is important to know because the bank who owns the property will want to obtain the "market" price for the property. It will also let you know a likely range that the property might appraise for which is important if you will require a loan to purchase the property. You and your agent could then work out an offer that you are comfortable with given the loan amount that you qualify for and what you are willing to pay for that property. Fortunately, as someone mentioned before, in the La Mesa area market, there is currently not as much competition at this price point as there is in the under $500K range.
The best thing to do is have your Agent talk with the listing Agent about status of the property and if there are other offers. You may also have your Agent ask the amount that the other offers are. Many miseducated Agents for some reason think it's unethical to ask this question and to answer it. It's a valid question and if the Agent answers it you can get some good information.
If you were my client I would speak to the Listing Agent, complete a comparative market analysis, and review your budget and other options you have in the market before helping you write an offer on this property. No Agent can tell you what to offer, but if there are 5 other offers at 50K above asking price, you should surmise that your offer should probably be as competative if not better.
There are alot of things that go into this. I am an REO agent for Phoenix/Glendale/Scottsdale/Peoria/Surprise in Az and other surrounding areas. I am seeing A TON of activity on ALL of my properties. All of them are selling for above list price. As I am not speaking for all REO's but for my properties they are going under contract under 15-20 days W/ multiple offers at and above list price. Typically if it is a newer property the bank will not budge on the price. Must be clean and above what they are asking, if not they will either counter at full or reject. As I am seeing alot more buyers per house you are competing to get the house. My banks are wanting best and final offers submitted NO COUNTERS. If the property has been sitting for a little longer then the bank is more open to being flexible, as they have little or no activity on the property. I recommend getting in contact with the listing agent and seeing where the bank is.
Sorry to disagree with the Realtors from other states....but the San Diego market is on Fire. Your agent should do a CMA, but in most cases you will be offering above list price. The agent also needs to find out (if they can) how many offers the bank has. This will help you determine how much over (if at all) you need to offer.
You are more fortunate than others in San Diego that you are looking in that high of a price range. There is less competition in this range, so you may in fact get a deal
But remember that even if you pay $850K or above, the home was probably worth almost double that a few years ago.
Good Luck!! I hope you find your dream home.
Time on market
Condition of Home
Strength of offer
Will you use them as a lender?
To buy an REO property, align yourself with your own Realtor who can evaluate the market, send you regular REO updates and negotiate on your behalf. Check out our REO site http://www.OCBankDeals.com. If you are not from Orange County, we can match you with a qualified REO expert in your area. Just let us know.