I'm torn.......who wins....banker vs. realtor

Question. I have an accepted offer on a REO for 77K. FMV is 110K. ARV is about 115K. My realtor said listed and sold comps are in the 110-120K range. My banker looked at the home today and didn’t like what he saw. He deals with investors and knows how these deals work so I value his opinion. He said that it looks like about 20K in work.

My realtor, who I also value his opinion, said that maybe 10-12K work is needed to get it sale ready. My banker did not deny me the loan but he thinks it needs too much work, location is so-so with train tracks in the backyard.

Realtor thinks its an easy sell, I’m getting it right, etc. I have closed deals with him before so he’s not after the buck. WE ARE on the same page. He’s not happy that my lender is saying this “behind his desk” and assessing properties as this is what HE does all day long.

So now I have a decision to make. Go for it or not. I’m going to look at the house one more time tomorrow to make a final decision. Any thoughts?


One key person you haven’t talked to (at least it is not written in your post): a contractor. In fact, get a few estimates. Also, make sure comps also back to railroad tracks (or at least one comp on RR tracks and make adjustments for others), and get DOM on comps if your exit is to flip it.

If you use the MAO formula, and even if you agree with the realtor’s repair estimates, the deal is very thin.

I hear about those “thin” deals all the time. That’s my bread and butter. Everyone looks for the 30K money grab or higher. I make these deals work. Its all location, marketing, and being creative.


If thin deals make you happy, then go for it. Why are you second guessing yourself if you know how to make these deals work?

Never had a banker question a realtor before as to what a home is worth and repairs needed. I have a contractor coming on Tues.


I never heard of someone saying behind railroad tracks as an easy sell. Not to many people want that, same as backing upto a highway…Its noisey and lowers the value

I’ve heard it both ways. This particular track is not used much and if a train does come thru it creeps. This is according to neighbors who have been there for 30 plus years. I would not like it so I would put up a private fence to “hide” the train.

i have not met too many bankers that really know how to value a deal. as for repairs, unless you go and spend a considerable amount of time with a notebook, pencil and a flashlight in the subject property, any number thrown out is a wild guess. One or two items can be the difference between $12k and $20k (and a quick sale or not)

1, Unless you’ve done dozens of these and can determine exactly what work is needed AND you have a wonderful contractor whose estimate is rock-solid, you need to add at least 25% to any repairs estimate.

  1. I would guess the train tracks take away 75% or more of potential buyers who would be interested in the same property without the tracks.