REO - how much is the bank in for? - Posted by 75violets

import · July 16, 2003, 3:16pm

Posted by js-Indianapolis on July 16, 2003 at 19:04:30:

What expereience have you had? There’s only about 5 ways that I go about it for my area. I’m sure one would work in yours. For the record, this is a judicial state.

First thing I could do is check the public records computers for a case summary after a judgement. That has the amount of the first, and the other liens that came on board. I usually see lawyers fees of $1500, and court filing cost of $107. Not much to worry about in court and lawyers fees considering the cost of a house.

Or, you can get the court case file itself, and have a look see. Obviously, that’s going to have everything.

Another thing I do is call the friendly lady who handles the sales and say, “I’m just looking to get the bank’s opening bid on 123 Main, the Sellers’ House.” Normally, it’s about what the bank was owed. And before I get heat for that, yes, I’ve seen the occassional oddball half price opening bid. Never have I seen more than what’s owed.

And if none of this is available in your area? why not just do a quick title peek on it?

As far as REO’s less desirable in a stong market, you’re on it. I called on one today, just got the lead from a friend who saw it vacant. asking $97K on a house that’s worth $140K ARV. I’d guess 20K in repairs. They’ve taken 13 offers before the bank has had a chance to respond. Yeah, that’s a little out there. I’m gong to make it 14, just to give the realtor something to do. Why not?

import · July 16, 2003, 3:16pm

REO - how much is the bank in for? - Posted by 75violets

Posted by 75violets on July 16, 2003 at 15:16:46:

If an REO is listed with an agent, what would be an easy way to find out what the bank was into that property for? It seems a lot of the REOs I’m seeing are being listed at FMV.

import · July 17, 2003, 1:23pm

Re: REO - how much is the bank in for? - Posted by Sean

Posted by Sean on July 17, 2003 at 13:23:41:

Banks list properties in good shape for full market price, nearly always, and generally aren’t going to come down off of that price.

On REO’s needing repair they list them generally at their as is appraised value, and may or may not come down from that price. Depends on the bank, condition and location of the house.

I will tell you right now, I buy rehab REO’s nearly exclusively, and I have never paid more than 80% of the asking price, of course the asking price on that one was very very low.

The lowest off of asking prices I ever got one for this far has been 40%, and 50-60% are routine. This usually puts me at 50% of after repair value after I have fixed up the house, in fact I won’t touch a house that I can’t purchase and repair for 50% of the ARV.

But remember I am buying FIXER UPPERS, in lower middle and upper lower neighborhoods, in a county that has over 400 foreclosures a month, and I definately do not get every single one I offer on. But I do offer on every single one I find that I think is a reasonable house, but I only offer what makes sense financially…

I have seen banks be hard nosed to their asking price, and let a house sit for a year, only to auction it off and sell it for less at auction then they had offers for it during the year. There is no hard and fast rules.

I will say this, a good condition house, in a good condition neighborhood, the likelihood of you getting it for .50 on the dollar is next to nill. There is just no reason for a bank to discount a property that is in move in condition… you want the best price, offer them all cash, quick close, and find the ones that need work.

You can get discounts on all cash, quick close on good condition in good neighborhoods, but they won’t be 50% of asking, not even close.

Best of luck.

import · July 17, 2003, 8:37am

Re: REO - how much is the bank in for? - Posted by Dave T

Posted by Dave T on July 17, 2003 at 08:37:41:

I saw a couple of properties recently offered by two different banks. I submitted offers between 40% and 50% of list price. Each bank countered with a lower than list price, but told me that was the best they could do to clear their books.

Maybe the bank’s counteroffer was the amount needed to breakeven. Didn’t matter because the price was still too high for me to operate a profitable rental.

import · July 16, 2003, 9:14pm

REO - how much is the bank in for? - Posted by Bill H

Posted by Bill H on July 16, 2003 at 21:14:56:

Go check the public records…look for the trustee sale deed…about 3/4 of the way through in most instances and states it will say something like “xxx being the high bidder it was sold to them for xxxx.”

That is the amount that was the opneing bid and normally includes all the bank’s costs.

Yes, banks do sell for FMV…nothing wrong with that.

Good Luck,

Bill H

import · July 16, 2003, 5:04pm

Re: REO - how much is the bank in for? - Posted by KP

Posted by KP on July 16, 2003 at 17:04:10:

There usually isn’t an easy way by my experience. Sometimes the public records of the foreclosure will list a figure but it doesn’t always have all the lawyer’s fees included.
As for the listing price most are listing for FMV. If it is going through a agent there is the incentive to list at FMV. It often doesn’t matter what the bank is in for they try to get FMV if they can. That’s one of the reason’s I find that REO’s are less and less desirable in this strong market.

Great Luck,
KP