Made my first offer today. A realtor-listed bank repo. It’s been sitting for a while and needs a LOT of work. I had planned to rehab, rent for a year or two, then sell. After repairs, I would have had about 25 - 30% equity IF my offer had been accepted.
I offered 22% less than asking price. The bank countered with FULL asking price! Not much of a counter offer, huh?
I was excited about a prospective first property, but I’m not raising my offer. Something I read on this forum about numbers working???
Banks don’t speak the same language as normal sellers. When they reject your offer, all they are really saying is that they would like you to resubmit your offer later. I have gotten many REOs after months of submitting the same offer. If you like this deal, wait a month or two and resubmit your offer. They’ll either sell it to some amateur who will lose money on it or you will get it when it finally comes down to a rational price. Stick to your price and keep making offers every month or two.
Don’t let it bother you. Be persistent and decide if it’s the right deal for you. You’re ahead of 80% of the people who say they want to invest becase most never get started.
You did a great bid, you rarely want to pay what a place is worth or your time in real estate will end very quickly. So you did good, and your thinking is correct on not accepting their counter for full market value.
To add to the others, Move on and make more offers in the mean time. Don’t hang around and resubmit this offer only, hoping it will go through eventually. Be looking for more and making more offers. That way wether this one goes eventually or not, you have other things in the works and you won’t get too tied to this one deal.
I’m just surprised that the bank countered with the full asking price, especially since it’s been sitting for a while. I want to allow plenty of cushion so that I can avoid as much financial stress as possible down the road. My offer did that, higher offers won’t.
The house is in a nice neighborhood. At the banks price, it will still be a good deal for someone to fix-up if they plan to use it for their primary residence. Just not as an investment property.
This happened to me before then about three weeks later THEY lowered the price. At that point I was interested in a different project.
There seems to be no reason to the way the bankers are thinking. Don’t let that stop you though and like the other posters said keep making offers in the mean time and if your still interested and it hasn’t sold in a month or two make another offer (I would offer less then the original offer ).
Great responses everybody! I love the support that comes with this website. I have found that when a new bank listing comes up that they do not move. Like others have said before sit on it a bit. Stick to your guns. Have your number and do not offer one cent more.
I just had a surprising experience with a bank owned property. It had been on the market for 2-3 months. They started it at $59,900 and recently lowered it to $54,900. I offered $42,000 even and they countered with “can you get it to the mid 40’s?” I countered at $44,000 and couldn’t believe it when they accepted it!! The house needs $10,000-$12,000 in work and will sell for $74,900-$79,000.
I guess my bottom line is that you never know what the bank is going to do. Congratulations on stepping up and making something happen!! Good luck to you!!!
Saw a probate property today that’s been on the mlsfor 90+ days. They finally dropped the price from the original asking of $599k to $520k. It’s in a neighborhood where nothing is under $585k. I’m doing the numbers and I would need to get it for no more than $480k to make $30k on it with a fast sale ($550-$480 loan-$10k carrying costs for 3 mos-$30k repairs). Would feel a lot better at $470. Call the agent who is adament about not taking an offer under $500k cause the appraisal came at $510k. They’ve passed on 5 offers under $500k. I’m ready to take an investment trip outside of CA…these numbers are to scary.
If you get 585 on the resell basic numbers minus 30% discount puts it around 409. What 30 repairs, 30-35 realtor costs, houses here in n. ca are rarely selling under 4 months and even 6 months at times. Seems like that 520 is only around a 10% or so discount. Listing for 585 and what they are getting are of course two different things.
Made my first offer today. A realtor-listed bank repo.
Congratulations! You just did what 95% of people who crack open an REI book never do - make an offfer. Don’t worry about the rejection - I have yet to have a bank counter for anything more than $1-2k from the list price. Some people make a living off of REO’s, but I’ve never been able to get one. Mainly because they are hardly on the market for very long.
With S. CA prices I look for deals that will net me at least $30k. The percentage discounts are not realistic when the median SFH prices are over $500k. My $30k net is based on a quick sell price of $550k with no co-op offered. I’m an agent and will price it for a quick sell before putting it on the MLS. If the homes are priced right they will sell, and in this market you need to price it below that last comp, not at or above which everyone became accustomed to. My last listing sold in Oct within 13 days with multiple offers. I don’t take listings if the seller is unrealistic with their price.
Thats great I hope to make 20-30K on deals some day and you being a agent saves you a lot (30-35K) on average houses. Again that is great and thanks for the info. Up here almost nothing no matter how nice takes at least 3-4 months to sell unless it is really under priced.
Congrats. You’re on the road to success. If your first offer on any property is accepted than you most likely offered too much. Someone already said it…it’s better to have a good offer rejected than a bad one accepted.
Just keep moving along and continually making offers. You will hit sooner or later.
I had just finished submitting my 15th offer to my RE agent when she told me my 7th offer I submitted a week earlier was accepted (my first acquisition). Sometimes you never know - just hang in there and stick to your criteria. BTW, that was about two years ago.
What I have done when a person or company counters back at full listing price is to counter them with an offer LOWER than my first. Not a lot lower, but enough to let them know that if they want to play games, I’ll play along.
Then wait a while and re-submit your original offer.
