The banks have the listing agents do what is called Broker Price Opinions before they even list the property. This is a type of market analysis that should be pretty current with what home prices should be selling for in the area minus the repairs that need to be done. Typically, on a bank owned property the people did not leave on good terms and sometimes they take things out of the house. If not, then you are lucky. They are angry and mad for losing their house. I have even seen electrical wires ripped out of the walls, toilets, faucets, ovens, dishwashers, cabinets, carpet etc.
I any event, I have dealt with bank owned properties and they do take longer. Many times, multiple offers will come in just because people think they are getting a good deal. You can get great deals, but typically, if the house is really nice, it could inflate the price with people trying to outbid each other.
Recently, we just closed one, and my buyers made a full priced offer and asked for 12,000 in closing costs to be paid by the seller. They did, however the whole transaction was horrible. It went over the closing date by 2 weeks because the bank did not have all the paper work to their escrow company. The grant deed was not there and nor was the power of attorney. My buyers were lucky and were able to stay in the place they were renting, but had they counted on that date to close, they would have had to rent a hotel and put their stuff in storage and then had to move it all again. The banks typically have their own escrow companies and they really are overwhelmed with work and you don't get the typical great service from a regular escrow due to the fact the bank's escrow gets handed all the deals and does not have to work for them. I cannot tell you how horrible this escrow was to deal with not returning calls etc. I am sure it all depends on the bank and the escrow, but going over 2 weeks after the close of escrow closing date sure was one of the hardest things for me to watch because I was helpless as the agent...waiting for the lender and escrow to coordinate funding, doc signing etc. Just know, it will take longer so if it does not you will not be disappointed.
Also, you do stand a chance in losing a house if you don't make a fair offer. If the house is 600K, and you offer 535, before you do, why don't you talk to you realtor to ask for comps of the area and compare what has sold to what you are looking to buy. If you really like the house and it is worth more, and the bank knows it because of the BPO that was done, then they may hold off. They are trying to get the highest dollar back on their investment as well.
Joan Patterson, B.A., G.R.I., A.S.P., Realtor
Keller Williams Realty
8250 White Oak Avenue, Ste 102
Rancho Cucamonga, CA 91730