I made an offer on an REO property last week. The listing price is $282,000 and I offered $245,000 plus I am

Asked by KJ, 15232 Tue Jan 6, 2009

asking for 3% cash back at closing. I was just informed that there are 2 other offers and the bank that owns the property wants our best and final offer now. I need to submit our best and final offer by tomorrow but I don't know what the other offers are and I don't know how high I should raise the offer. I didn't have an agent going in so the listing agency provided me with one of their agents for the offer but the agent did not give me a suggestion as to what I should bid. How high do you think I should go?

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8
Terrence Cha…, Home Owner, Allentown, PA
Tue Jan 6, 2009
This is exactly why people should not go through the listing office to put in an offer. It's called "Dual Agency" in the technical sense. The broker has the seller and the buyer. Right now, you can't fix that. In the future, before looking at a property, go find an agent who will work with and for you. Ask your friends and family if they know of a good agent.

As for the offer, have your agent do a CMA for the property, because they should really work for you. Then base your offer on what it's worth, how much you like it and how long you will be staying there. The closer to a cash offer without any contingencies for a mortgage or inspections, the better. Remember, it is the bank you are dealing with, not a person who lives there. They just want to get rid of the property with as little fuss as possible.

Hope that helps.
1 vote
Randy Hooker, Agent, Chandler, AZ
Tue Jan 6, 2009
Hey KJ,

My dad would say, that's rather like "closing the barn door after the cows are already out." I would STRONGLY recommend that you seek the services of a competent local Realtor® ~ ASAP! Run the comps and listen to his/her counsel. Then allow them to assist you in the preparation of your highest and best offer.

Good luck!

...randy
1 vote
Mimi, , Pittsburgh, PA
Wed Dec 16, 2009
you can do your own cma, go to the property assessments and look up what people paid for their homes on the street you are buying on and average it out, that is what real estate agents do and I always came out to the amount they have, at times I even done better cause I put more time into it!
0 votes
Jeffrey Benn…, Agent, Pittsburgh, PA
Tue Jan 6, 2009
As Rebekah points out, we can't give you specific advice, much less numbers, without knowing the situation (and providing you with a Consumer Notice). Won't stop me from spouting generalities, though :-)

Do you have a Buyer Agency Agreement with "your" agent? If not, the agent may be working under subagency, which means they represent the seller and *only* the seller. If you do have a buyer agency agreement, your agent is a dual agent -- working for both. That means the agent can't do anything that harms either party, and is bound by confidentiality (e.g., she can't tell the seller your best price if she knows it). Under sub-agency, there is no confidentiality -- anything you say can go straight to the seller (and be used against you in the negotiation).

With REOs you typically have a pile of addenda that say the property is "as-is," they won't turn utilities on, etc. They also put extra conditions on the sale, such as requiring the buyer to pay all transfer taxes. You generally can't ask for seller assist on these deals. Even if it isn't explicitly prevented by the addenda, it reduces your offer by 3% in the eyes of the seller. You will probably be the only buyer asking for closing cost assistance.

If you do have a Buyer Agency Agreement, the agent should be helping you (e.g., with a BPO). If he isn't, go to the broker, who should either light a fire under him or assign you a new agent. If you don't have an agent ("your" agent is a sub of the seller), *get one fast*, before the bank takes one of the other offers.

Your "highest and best" depends on your personal financial situation and future plans for the property. Only you can determine that figure; an agent can then help you determine whether this particular property is worth it.
0 votes
Scott Godzyk, Agent, Manchester, NH
Tue Jan 6, 2009
KJ the first thing going against you is you are going at it alone, that agent does not represent you, therefore can not give you that onfo. A good buyer broker can do a brokers price oppinion for this property and tell you what it is worth in todays market so you can make an educated bid. Second if you are getting a mortgage, they will not allow you to get any cash back, you can use 3% as credit towards closing costs if you are short on cash. If you have a good down payment and closing costs eliminate that request, not only is price important but terms, that means as few or no contingincies. Do your inspection ahead, include a pre approval letter and be ready to close in 30 days. good luck with your offer.
Web Reference:  http://www.ScottSellsNH.com
0 votes
Rebekah Sieg…, Agent, Pittsburgh, PA
Tue Jan 6, 2009
KJ,
While I'm sure many of us would love to offer our advice and professional opinions, our Realtor Code of Ethics actually does not permit us to discuss information pertinent to an individual consumer's situation without first providing you with some disclosures required by law. Therefore, you're unlikely to be able to obtain detailed advice from a Realtor without some direct contact. Unless you have already signed a contract with the listing agency for exclusive representation by the agent they provided to you, I would strongly recommend seeking out the advice of an experienced Realtor. Good luck.
0 votes
Terrence Cha…, Home Owner, Allentown, PA
Tue Jan 6, 2009
Oh, and if the agent "given" to you won't do a CMA for you and you don't have a buyer's contract with the agent, then I would say go find someone else quickly and not from the same office.

Good Luck
0 votes
Randy Hooker, Agent, Chandler, AZ
Tue Jan 6, 2009
p.s. KJ, why are you asking for 3% cash back? Is that to cover your closing costs? Will you be financing your purchase? If you're financing it, then the lender will most likely NOT allow you to receive ANY cash back. But if you're wanting tihe seller to pay your closing costs, then that's usually do-able. Again, tho, find yourself a local experienced Realtor to serve as your Buyer's Broker, and then go for it!

...randy
0 votes
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