Home Buying in 19020>Question Details

Toni, Home Buyer in Bensalem, PA

I have found a REO property with asking price of 379,900. I need a savvy, experienced agent that is not

Asked by Toni, Bensalem, PA Mon Jan 26, 2009

afraid to go for a bargain in a buyers market to aid in sending offer to bank. Our starting offer is 100,000 through financing. If cash offer is doable we can offer 50,000 in cash. Actually had one agent show me the property and she later showed my husband the property do I have to submit offer through her since she showed us the property? I sense she is very inexperienced and unreliable. Please respond quickly as I'd like to place an offer in the next day or so.

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Toni: You are probably wasting your own and any agent's time. You took up an agent's time already. How do you plan to compenste her?

Also, don't believe anything that a Texas agent tells you about what may be the case in Pennsylvania.

P.S. I'm plenty savvy and have a steady REO account and I wouldn't touch your deal.

Sorry about that.
2 votes Thank Flag Link Mon Jan 26, 2009
Yes, you better hurry! The banks are giving homes away. They are anxiously awaiting to sell you a home for $280k less than the appraisal. And only a savvy agent can trick the bank into taking your generous offer.
2 votes Thank Flag Link Mon Jan 26, 2009
Hello all,

Just a quick update, the offer was rejected. I am, however, still pursuing the property. The house is now listed at 364k. When I found the property it was listed at 399k dropped from original asking price of 450k. After looking at the comps in the area, I believe this property was and still is overpriced as the homes are dropping in value and the property is being sold as is. My offer was pretty low, but it was a chance and a learning experience. My intial offer may have been an insult, but again it was a learning experience. I acknowlege I was naive in knowing the agents role in presenting offers and have since learned more. She is fully capable for submitting an offer on my behalf. I appreciate everyone's input as I have gleaned from your many years of experience. I signed a contract with the agent and she is helping me with the search. I'm hopeful that we will find the right home at the right price.
1 vote Thank Flag Link Mon Feb 2, 2009

If the property is listed at $379,900 and it is up with a bank, you need to find out if the property is actually worth what it is listed for. I'd also like to know how you came up with $100k for your offering price and why you would think that any seller bank or person would accept such a low offer?

I have over 10 years experience with bank properties and generally banks will list a home under what it is really worth to start with and they will wait until they get what they need. I am an aggressive, experienced REO Realtor and that offer seems way out of the ball park but I do not know all of the facts.

Also, if you made an appointment with a Realtor or the listing agent and had her show you the property without doing your homework first and not hiring your own buyer agent, that is a huge mistake. I would need to know if you signed a Buyer Broker Agreement with the agent who showed you the property?

If you didn't put an offer in yet, please give me a call and I would be happy to talk with you. If you have, could you please let us know what the out come was?

Thanks. Feel free to read my blog at http://www.reneeporsia.com I write a lot about bank properties and buyer agency.

Renee Porsia
Associate Broker
(215) 669-0589 Direct
(215) 358-1100 Office Ask For Renee
1 vote Thank Flag Link Fri Jan 30, 2009
My opinion is it doesn't matter how experienced the agent who submits that offer is. I doubt you'll even get a counter.
1 vote Thank Flag Link Mon Jan 26, 2009
Inexperienced and unreliable?? What leads you to believe that? Is the property a dump? Did your agent give you a CMA of what the property is worth? Is it worth only $100K or is it really worth over $350K?

Have the agent do a market analysis on the property. Whatever the property is worth according to the CMA and how much you like the property is what you should offer.

Low balling that far beneath what the asking price is probably will get you no where. Also, it doesn't matter how "savvy" an agent is when it comes to bank owned properties, the agent will never get to talk to them. Also, the seller's agent only talks with a contact at the bank, not the person making decisions.

You want a real bargain, hang out at the Sheriff sales. Go ahead and put in what ever offers you wish, the worst that can happen is that they say no.
1 vote Thank Flag Link Mon Jan 26, 2009
Wow. Gets a little tricky here. PA State Law has been interpreted to say that once you have made contact for a property even without a signed document, you may well be liable for any fees to that Agent.

The good part is, what you have to offer most likely will not float until a property has been on the Market for many, many months. If you need Financing, have it arranged outside of the offer Before the offer is made. If it is solely a Cash Offer, make it with a letter from Your Bank stating the Funds are Available.

What you are trying to do IS possible. You may want to discuss your concerns with the Realtor you have made contact with. She may have access to other Agents that have the expertise.

Good Luck!!!

Nicolette Wayand
0 votes Thank Flag Link Mon Aug 25, 2014
You need to offer what the property is actually worth, not what you think it is worth. The bank is not going to give it away. I was a negoiator for 15 years for various banks doing short sales and yes short sales have been around that long, there are various reasons that short sales happen, not just the market collapsing. And the bank is going to look at the appraisal that they got, and 99% of them order it thru a vendor to make sure that it is assigned out to an appraiser that has no affiliation so that the appraisal is completely objective and in no way biased. What the bank accepts is going to be based on that appraisal and most banks won't go any lower than 90% of the apprasied value in their net recovery. And with the big banks it doesn't matter if it's all cash or thru financing a short sale is a short sale. So I would find out what the property is worth and offer that amount, chances are you are going to value it lower than the appraiser.
0 votes Thank Flag Link Mon Aug 25, 2014

Out of curiosity, did you write another offer on the Bensalem listing? I see that the price was reduced. Even though your first offer was low, you could still get a great deal on this bank owned home. Indeed, without having been through the property and only seeing the photo online as well as some aerial shots, it certainly seems to be a lot of home for the money.
0 votes Thank Flag Link Tue Feb 17, 2009
Ash, thank you for your comment. I agree with your viewpoint in many aspects. The housing boom was a tragedy and the prices were highly inflated, many borrowers at that time couldn't afford those inflated prices but were approved for hefty monthly mortgage payments on very modest homes and now are hit with the reality that they now have to lose their homes. This is so very unfortunate. The banks do need to realize that current home buyers will not follow suit with those who are now facing foreclosure only 2-5 years after purchasing a home. I agree that the banks need to take a hit in the pricing of these homes. These homes are not worth the asking prices and the pool of buyers looking for homes now are much wiser to the devices of preditory leading practices and less desperate to jump into a home for a marked-up of 20% or more. On the news this morning it was announced that 1 out of 9 homes are empty. The inventory of homes available for sale are higher than the demand for purchase. I've found that home owners that are attempting to sell their homes are still hoping for the highly abnormal profits realized by some in recent years. They owe more on their homes than the homes are now worth. Homeowners looking to sell won't be able to recooup their losses until a significant amount of years have passed. And banks will continue to increase their inventory of homes gained from foreclosure if they continue to set prices so high on these properties in hopes of recoouping their full investment in an inflated market that has now flip flopped.
0 votes Thank Flag Link Tue Feb 17, 2009
I read this blog and I like to know where were the agents when the prices were going up uncontrolled. OK the banks have an appraisal and comps, so what!! Where are the people to buy it? Oh yes, unemployed. Historically residential real estate has gone up 1.5% a year. When I bid, I take prices back to 1999 (before this mess started) and calculate to today. One bid, in cash, no negotiations. The banks are trying to minimize their losses, I get that. But they made the mistake and it is time to come down to reality. If you read a lot of economists that are experts in real estate, many agree another 20-30% correction in pricing will happen in the next year. I am sure the banks get that info also. So the question is do the banks want their money now or later? It is up to the real estate agent to convince the bank. Unfortunately the only information they have is the comps and appraisals. Frankly I am looking for land. I can build my own home. Unfortunately most are pricing land as if it was 2005. Good luck.
0 votes Thank Flag Link Tue Feb 17, 2009
Toni, Good luck in your search. I am sure you will find a nice bargain as you are working with a good experienced agent. many agents do not have experience with REOs.
Web Reference: http://www.gitabantwal.com
0 votes Thank Flag Link Sun Feb 15, 2009
Thanks for the update. Gled that you have benefitted from the experience. That how we allhave learned.
Best Wishes.
0 votes Thank Flag Link Mon Feb 2, 2009
Thanks for the update. Are you writing a new offer on this REO property?
0 votes Thank Flag Link Mon Feb 2, 2009
Hey Toni. This is a great question. Please remember that in most cases in Pennsylvania, All Realtor Services ARE FREE TO THE BUYER!! SO you should use one you are comfortable with. This Realtor can assist you in making your decisions, by provising you with information and resouorces to find out more on your own. IF you need to search for a home on line for free, with no obligation at all, click on this link
0 votes Thank Flag Link Sat Jan 31, 2009
Yes, keep us up to speed; I would love to hear what happens with the property. The listing says to allow at least 48 hours for the seller to respond.
0 votes Thank Flag Link Tue Jan 27, 2009
Thanks to all. I am moving foward with the agent that showed us the home and will keep you posted as to the final negotiated price. The 100k is a starting point.
0 votes Thank Flag Link Tue Jan 27, 2009
I checked out this listing online, and just looking at the comps, I really think you are being too optimistic in your offer price. Your current agent has probably become reticent due to your ludicrous offer. Even though the home is an REO, the bank is going to try to minimize their losses. The home is already below market value at 379,900. I think 335,000 is a fine offer based on some of the comps that I found; however 100,000 with financing or 50,000 cash is likely to be laughed at by the owner-bank.
0 votes Thank Flag Link Mon Jan 26, 2009

Do not listen to Nami in Texas. There is a common law doctrine of "procuring cause." Now that you have already had the agent show you the home twice, she is the procuring cause of the sale and will be entitled to any commission. Do not take legal advice from real estate agents.
0 votes Thank Flag Link Mon Jan 26, 2009
Hello, Toni,

If the agent showed you the property, then you are bound to submit the offer through her. This is the problem of not working with an experienced Buyer Agent. Did you interview this agent, or just call her to go to see the property. This is unfortunate for both of you.

As far as the price is concerned, the bank has already had the property appraised and they know what it is worth in that marketplace where it is located. You can offer them anything you want, but, at the end of the day, it will be sold for market value. Unless they are desperate, they will probably not sell for 30% of value - but who knows??? Good luck.

When you are ready to work seriously with someone who has extensive experience in real estate sales and appraisals, you may contact me. I would be interested in a joint interview where we could learn something about each other and see if it would be a good plan to work together.

Carol Murray Cei
ReMax Millennium
0 votes Thank Flag Link Mon Jan 26, 2009
I am a 'Savvy, experienced agent' (if 20+ years counts as experience). My services are available to clients for a fee. Usually my offer includes a guarantee that if they do not get the house, they do not have to pay me anything. That is a pretty generous offer, don't you think?
'Savvy and experienced' also comes with some wisdom that has been gained in the school of hard knocks, and like William Holt, I would not choose to spend my time pursuing your offer without a reasonable expectation of getting paid. Are you offering a retainer to the agent who puts in the offer, paid up front and non refundable,to compensate them for their time? If not, I doubt if you'll get any 'savvy and experienced' takers.
One other piece of information that might help those who are reading along. At the present time there are certainly bargains to be had. My experience with REO properties is that the banks are pricing to get the homes SOLD! That means they have a current appraisal done and then set the asking price at somewhat less than that new appraisal, with reductions every 30-45 days until the property goes under contract. But they are also turning down those lo-ball offers of 50%-70% of asking price.
Bargains? YES!! STEALS?? NOT likely
Hope that helps
0 votes Thank Flag Link Mon Jan 26, 2009
Hi Toni, you will need to make this offer with your support of why you are asking this low. Such as photos, detailed items and what needs to be done and cost, Costs and estimates by reputable insured individual, as well as any sellers disclosures, inspection reports and CMA's of the property. There are several other things you can submit as well. You will need to show where you are getting the money from and have a significant deposit submitted with your offer. Let me know if I can help. I require all my buyers to sign a buyer/broker relationship agreement. Did you sign one with an agent yet?

Cheryl Supplee
Coldwell Banker Preferred
0 votes Thank Flag Link Mon Jan 26, 2009
If you haven't signed a buyer representation agreement with that agent, then you are not contractually obligated to use her. However, it would be common courtesy to reward her efforts in using her. May be you can express your concerns about her inexperience and she can have help from her broker to help you.

0 votes Thank Flag Link Mon Jan 26, 2009
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