It came to $5,000 in closing costs and when you do the math it was exactly the same dollar amount, from my point of view, as the previous offer that they rejected. I moved the CC from outside the contract to the seller’s column. I thought maybe it was buried in the offer, but on the last page it spelled it out plain as day.
This is how I concluded that the REO officer had a goal of getting as close to asking as possible using a simplistic comparison of asking and offer prices.
Would not work with HUD as their formula takes into account every dime you want back from them for various costs.
Around here anyway, the banks will systematically lower the price every 30 days or so. Not a lot, however, usually in $5k increments, give or take. You have to do your own math and decide what the house is worth to you and make that your offer. Getting an offer accepted is only a win if it’s a great price for you. Anyone can get an offer accepted if it’s a great price for the bank. Every time you see a price change, re-submit the offer. Always include an earnest deposit check so the listing agent has to do his/her work and can’t just blow you off.
I just contracted for my first REO deal. I’ve been a more conventional investor for years, so this was a different experience.
One thing I learned is that the Bank Officer handling a particular property has different priorities than a normal seller has. For example,
Property listed at $99,900
Needed a lot of work, so offered $92,000
Bank Counter at $99,000
I Counter at $93,000
Bank countered at $98,000
I countered at $98,000 and added 5% in closing costs, essentially the same offer as I made before.
Bank accepted offer.
They are under internal pressure to get as close to their asking price as possible. If you can provide a way to embed additional expenses from your side of the ledger in the deal while remaining as close as reasonable to the asking price, it might help the REO officer to make the points he has to make.
Rich, did you have a misprint here? I dont understand what your saying. countered at 98,000 and added 5% in closing ?? plz explain when you have the time, thanks