Foreclosure Pricing

I’m kinda new to the foreclosure market and I’m looking for some input.

I’m located in the heart of the banking industry in Charlotte, NC. The foreclosures here are being intially marketed at FMV even though they may need thousands of dollars of repair, very unrelaistic expectations from the banks in many peoples opinion. It’s not uncommon to find properties that have been listed for a year or more with several different agents with seemingly no hope for selling at the prices they are asking. Somebody somewhere is taking a bath on this stuff.

Having met with and talked to many investors from other markets who have relocated here, I get the feeling that our foreclosures are marketed at higher prices and the banks are less willing to negotiate because we’re in the banks backyard.

I was hoping to get some input on how foreclosures are initially priced and eventually sold in in other markets.

Thanks for your time!

In my experience, the lender or asset management company has a BPO (Broker Price Opinion) done prior to foreclosure. Since this is an exterior (drive-by), it’s not always accurate, but it’s a starting point. Once the property is actually owned by the bank, they do another BPO (interior) or two and then an appraisal. That’s how they get the data to use for a listing price, but that doesn’t mean they list them for what the BPOs indicate a reasonable price would be.

Yes MISSMBB is correct

In addition, you usually will need to get an itemized list of what needs to be done to the house and how much with your discounted offer.

This helps greatly and makes the bank think twice about the BPO.

I have gone as far as taking digital pictures of the house and what was needed and the itemized list with my offer when the bank was being idiotic.