Does anyone with experience dealing with REOs have any recomendations as to what formula or percentage a bank may be willing to accept below the asking price listed in the MLS for the REO?
I know how to locate the final judgement document in the public records to have an idea as to how much the previous owner owes the bank. Is this final judgment amount a good starting point or is there a better way to structure offers on REOs.
Do they usually want to get the entire judgment amount?
Actually each bank is different as each property is different. If the property been on the MLS for awhile, banks can get more desperate. Also your ability to close fast, such as with cash can increase your odds with a low ball offer.
I recommend making an offer around 60cents on the dollar and go from there. They will counter and it can be a back and forth thing for awhile but till someone gives in.
Here is something I believe it. If your not embrassed to make the offer, then you offered to much money.
I just finished doing one. I agree, start very low. Keep in mind, the banks and the realtors that represent the banks do these everyday and are very stubborn. The numbers have to work for you. Don’t listen to any stories that the selling realtor tells you and always be ready to walk away. The bank needs to get rid of the property to get it off their own books. The bank already knows they are going to lose lots of money. You don’t want to disappoint them!
I’ve heard some ridiculous stories from the selling realtor including one that the woman at the bank signed the P&S by mistake and couldn’t give any more money back, but we still got some more anyway.
Like he said above, its a long drawn out negotiation, don’t get discouraged, and if they keep sending you counters, they need to sell it. I ended up settling at paying 84% of the appraisal even though I didn’t negotiate as best I could have because it was a personal house for my brother and he was rushed.
We offer the price that suits our needs. If they don’t accept, no problem. I’ve worked closely with agents representing REOs and just try to be straightforward with them. I let them know that we’re serious, have the funds, and are going to close at the terms and price we offered. They can mess around with people promising higher dollar amounts, but it’s better that they deal with us.
We think we may get a $66k cash offer accepted when the bank was asking $125k. They can counter if they want.
I have offered on 5 REOs last week…assuming the .70 formula. They all countered with the same amount that they were asking earlier but increased the earnest money…It is a joke how these asset managers are running their business…I am very serious about these offers and this is how they countered…oh well, it is their loss.
Ronnie