So you are saying that you would offer $30,000 on a $300,000 home? You are saying that you usually end up buying the property for $90,000 on a $300,000 home? I think you are full of it! You are one of those buyers that think just because you have cash and you can close quick that the banks will accept your offer over anything else. Obviously you don't know the banks these days. Too bad your last experience was back in the 1990's. I can see why. If a buyer has solid financing and can close fast and is offering more than a cash buyer that can also close fast, I can bet you that the bank will accept the financed deal over the cash deal any day. The bank is getting cash at the end of the deal anyway. They could care less if it's a cash deal. Actually, cash deals are usually more skeptical these days. A buyer may show proof of funds for their cash deal up front, then all of a sudden have no proof of funds last minute right before closing. These are the deals I am more cautious around.
Us experts must all be stupid. We do this stuff everyday, yet you know more than we do. If acting like a pig is what you like to do, don't recommend that to someone else that is looking for good solid advice. If you act like that with the banks these days, they will laugh at you. Fair Market Value is what it is. They are not going to be stupid just because some pig is waving their cash around. Get a grip.
In my experience the banks are willing to come down about $10-15k off their asking price. Just recently I had some buyers who didn't listen to my advice about this. They wanted to buy a beautiful bank owned condo in Scottdale that was listed at $229,000. They asked me my opinion of what the bank would accept and I told them $215,000 at the least. Well they wanted to offer $180,000. So we did, and much to their amazement, but not mine, the bank countered back at $215,000.
Many of these bank owned properties are priced WELL below market value. Buyer's have to be sensible and not get greedy. You're getting a fantastic bargain on these homes. Negotiate a bit, but don't be ridiculous.
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If you see a great deal and it looks as though it is underpriced, find out if there are multiple offers on the proeprty already. Usually in this case you will have to submit your highest and best offer. If my client really wanted the home and it was listed way under market value, I would educate my buyer to possibly submit an offer over list or at list.
Hope this helps. Good luck!
So assuming the listing price is close to present market value (but only after costs for necessary repairs are included to get it in good living condition and take care of all serious flaws noted in the inspection) I would not, as an investor come in with anything higher than 15% below that asking price. This will then cushion you somewhat should the next 12 months prove to be like the previous 12.
If you are looking to live in the home, however, that might influence you differently. you may be willing to make an offer closer to asking price just for the privilege of acquiring a home you truly like in a neighborhood that meets your wants and needs. This will typically be the case with desirable homes in desirable neighborhoods.
For the average bank owned home in sex predator infested neighborhoods, however, the rental situation is such right now that you are best lowballing to the max. keep in mind that those looking for rentals in those shady neighborhoods these days with few exceptions are people with crappy credit ratings (who were likely just recently foreclosed on themselves) and you will not only be buying a rental, but possibly one big headache as well.
All of my clients are exclusively looking for bank owned or short sale homes, so I've been more than waist deep, you could say...
I submitted a contract on a bank-owned home for some clients last week; 10k under asking price ($150k on $160k asking price). It was actually a very fair & reasonable price for the home. The bank countered back at $165,000!!!!! Yes-- you are reading that right--- the bank countered HIGHER than asking price!
The asset manager wasn't very well informed on the market conditions, and assumed the house was worth what it was back last fall. We had found a better home for my clients and withdrew our offer. After the bank took a week to originally get back to us, once we withdrew our offer, we had another counter offer within hours from that bank's asset manager in a much more reasonable range. I never heard or have seen anything like it... I guess once they realized we were the only rational live buyers for that home, they changed their tune, but it was for nothing.
My suggestion is that if you lowball them, send strong comps with your offer to support your bid to the asset manager. All the asset managers know is numbers. If you're going to lowball, for better results I also suggested a fully completed LSR and a closing date of 30 days or less to show you can move, move, move once they accept the offer.
I can't tell if you are serious or if you are trying to be a comedian. It's either you are joking or you know absolutely nothing about our economy in Las Vegas. I am glad you think someone can just go straight to the bank and bypass the bank's listing agent to make an offer. This just shows how stupid you really are.
ENOUGH IS ENOUGH! THE REAL ESTATE PROS HAVE A TERRIBLE TRACK RECORD! WHO NEEDS THEM? CAR SALESMEN, STOCK BROKERS....REAL ESTATE PROS? WHAT A JOKE. JUST LISTEN TO YOUR LOCAL OR NATIONAL BOARD OF REALTORS OPINIONS/COMMERCIALS. EVERYTHING IS NORMAL! I JUST LOVE SEEING THE PROMOTION AND HYPE. TOP 1% REALTOR IN THE USA! TACKY PHOTO ADVERTS! THE ENTIRE INDUSTRY IS LIKE A CIRCUS! TOO BAD SO MANY PEOPLE FELL FOR THIS HYPE! IF YOU ASK ME, NO HOME IN VEGAS SHOULD SELL FOR MORE THAN $100K! I SIMPLY CAN NOT BELIEVE THAT HOMES HAVE SOLD FOR IN THE MILLIONS! NUMBERS JUST DONT MAKE SENSE CHILDREN!
DONT LISTEN TO THE REALTORS. THEY ONLY CARE ABOUT MAKING A QUICK SALE! ITS BEST TO DEAL DIRECTLY WITH THE BANK. BYPASS THE LITTLE BOYS AND GET IN TOUCH WITH THE REAL DECISION MAKERS. LAS VEGAS? PROPERTIES THERE SHOULD BE SELLING FOR MUCH LESS THAN WHAT THE EXPERT AGENTS ARE REQUESTING. SOLID FINANCING HAS NOTHING TO DO WITH IT! CASH IS KING! DONT FOOL THE PUBLIC! DONALD TRUMP WOULD BE PROUD OF YOU!
I may not be adding anything to this discussion that hasn't already been covered, but a good deal is a good deal. Take the market data, and come up with a number that you feel comfortable about. I've seen far too many deals lost already when the truth of the matter is that the amount that was being argued over would result in a difference in monthly payment of $30 per month. Be comfortable with YOUR number before you get comfortable with THEIRS. Hope this helps.
Windermere West Valley
I would figure at a minimum of 8% below the list price. The average REO property sells around that 8% below list. The last offer I represented the buyer on we were able to get the home 18% below list price after a 8% reduction in price a few days earlier. Times are changing though and that percentage may change as well. The banks are becoming more agressive with their pricing to unload these homes from their books.
I currently have about 10 REOs listed and sold 5 since the 1st of the year. My experience has been that banks will almost always counter but usually try to price the home below market value to begin with. This typically avoids a large gap between the offer and list price. They are also willing to pay concessions in most cases. The great thing about REOs is that it is all about the bottom line for the bank, there is a floor that they just can't go below so I think you are on the right track w/ your offer. They should counter you if not accept it immediately. How long has it been listed?