I’ve been following an REO now for a few months. Before it was even listed, I started doing some research. The owner’s bought it several years ago for around $120k. My estimates show the loan was paid down to about $115k with no other lien recordings. I priced the FMV at around $125k. When the place finally listed, the price the bank wanted almost $145k! Can anyone explain this to me? It has sat at that price now for several months with no offers (understandibly). Are legal fees so much they have to jack the list price up that high (even almost $20k over FMV)? Thanks.
A property is worth what someone is willing to pay…and you never know what’s going thru someone else’s mind. I have been told on the last two rental properties that my asking rent was too high and that I’d never get it…Guess what??? I did and had several to chose from.
That said, yes, lawyers are expensive…the legal and holding fees mount fast. The lending institutions are going to start high in hopes of catching one fool and you only need one solid buyer!
Don’t let that stop you from making an offer on your terms using whatever formula works for you.
Keith
This is so true in Austin right now. Foreclosures I have put bids on have been selling at 5%+ of list.
Write an offer based on what the property is worth to you.
And don’t even worry about what they listed it at.
The bank will come down in due time.
Most banks have a limit on the dollar amount they can have in REO’s and when they hit that limit it is time for them to bail.
Have your offer in and ready so that when they do come down…you are first in line.
Be nice to the agent…they are your friend…and just keep calling.
:dance2: