Is it crazy to offer 70-80 cents on the $ for bank-owned, pre-forclosure, REO, etc... listed homes? Thanks!

Asked by Kea, 90045 Mon Jan 28, 2008

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11
Access REO S…, , Los Angeles, CA
Thu Mar 6, 2008
Yes it is crazy, but only if you expect the bank to respond. Seriously, I work with lots of REO property and banks are very steadfast in their expectations. The price they list it at leaves very little room for negotiation. It is "as is" with at best maybe room for 5% (and sometimes that's being generous) negotiation. Don't ever count on low-balling a bank and getting a response, unless the listing agent believes he can sell it for more and lists it higher than what the bank is willing to accept so that they can make a little money off that margin.
Web Reference:  http://www.condostorela.com
1 vote
Jim Walker, Agent, Carmichael, CA
Wed Feb 6, 2008
It is not crazy for you but it is crazy for your agent. Look at it this way. If you spend five hundred hours to make five hundred offers that are 70 cents on the dollar and you finally win one, you're reward is the 30% you saved. On a $100 K property for $70K you made $60 per hour for your offer writing time. Your agent stands to make 2.5% of the $70,000 or $1750.. His reward for 500 hours writing those five hundred offers (*one winner, 499 losers) Is $3.50 per hour. (minus expenses )
1 vote
Blayne Pacel…, Agent, Studio City, CA
Thu Jan 31, 2008
It is extremely hard to get pre-foreclosure. Trying to get the owners of pre-foreclosed houses to sell is not as easy as it sounds.It is much better to wait until the house gets foreclosed on and the bank takes back the property. As far as offering 70-80 cents on the dollar for REO or listed homes really depends on the motivation of the seller. Yes, banks are sellers also. Some banks have lots of inventory(homes) and some don't. It is very important to find out how motivated the banks is. Some sellers are extremely motivated to sell and will take less than what the house is worth. You need a good agent to help you find out!
Web Reference:  http://www.BlaynePacelli.com
1 vote
Jodie Franci…, Agent, Studio City, CA
Mon Jan 28, 2008
Hi Kea,

No it's not crazy, but you will probably be more successful with bank owned properties vs. pre-foreclosures. Has anyone explained the difference? Usually a preforeclosure will result in a "short sale" and that means that the seller owes more on the house than what the market value is. The bank needs to approve the short sale, and this process takes time. With an already foreclosed house, the bank now owns the property and doesn't want to be in the business owning homes as Liz mentions. Each situation is different, and every bank handles these sales differently. I recommend having a good buyers agent to assist you in crafting an offer that makes sense to you and hopefully will result in the bank approving the sale. Feel free to contact me if you would like additional information or assistance.

Good Luck! Jodie
1 vote
Don Tepper, Agent, Burke, VA
Mon Jan 28, 2008
Not crazy at all. However, you'll probably find that some of the properties are already very attractively priced, while others might not be great deals even at 80 cents on the dollar. So don't simply use a "rule of thumb" of offering x%. Know what the properties are worth, and work down from there.
1 vote
Ronnie Kline, Agent, Los Angeles, CA
Mon Nov 12, 2012
With each property (bank owned or standard sale or short sale), you want to research the value before making your offer. Autmatically lowballing on every home will be a time waster as many homes are already listed for a price under what they will sell for. Do your research and offer what is fair and works for your budget, on each property. Yes, it takes more time and effort, but it will be worth it in the end. If you are working with a good agent, they will do the research for you.
0 votes
S, Both Buyer And Seller, 91311
Wed Mar 12, 2008
Wouldn't think it is crazy if using supply and demand. Check out

http://countrywide-foreclosures.blogspot.com/

for all of the countrywide foreclosures - thousands and thousands - and check the left hand side for links to other lenders
0 votes
Ray Chen & C…, Agent, City of Industry, CA
Sun Mar 9, 2008
0 votes
Merrie Kung, Agent, Los Angeles, CA
Wed Feb 6, 2008
Visit my blog at http://www.lahomesinsider.com for an article written on how to purchase a foreclosure. I think that'll answer some of your questions.
0 votes
Liz Stevens, , Berkeley, CA
Mon Jan 28, 2008
watch for those that have been on the market for over 30 days. remember that the bank does not to be in the business of owning property, so they are better negotiating bets than the folks who are trying to save their homes by pricing them where they need them to sell. liz
0 votes
Terra Bruns, Agent, Santa Clarita, CA
Mon Jan 28, 2008
Not at all--if you work with an agent that really knows how to structure the deals, and knows the "hot buttons" of the loss mitigators, you can stand to make alot of money, or save alot of money depending on what you are purchasing for. Feel free to contact me to further discuss this wonderful real estate market!!
Web Reference:  http://www.TerraBruns.com
0 votes
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