What should be offered on this REO? - Posted by Praveen

Posted by Praveen on June 01, 2006 at 13:35:37:

As the property is listed for 340 on MLS, Can I deal directly with the lender or I have to deal through the agent.

-Praveen

What should be offered on this REO? - Posted by Praveen

Posted by Praveen on May 31, 2006 at 21:18:53:

Hi everyone.

Quick advice from investors dealing with REO. There is a property listed on MLS for 340K (Actual value) from past 4 months. Property was foreclosed with outstanding due of 240K. As per the conversation with the RE agent, the property had been fixed before listed on MLS. But I doubt because property is listed on MLS as “need TLC”.

WHat should be offered on this property? Any advice would be greatly appreciated. Fixup cost is not known to me at this moment.

Regards
-Praveen

Re: What should be offered on this REO? - Posted by Berno

Posted by Berno on June 02, 2006 at 14:46:49:

The FMV and the loan balance is nice to know, and it helps you figure out what to offer but there are a lot more things to consider.

In the end, you can offer whatever you would like to. If there are no issues with the property, shoot them an offer below the amount owed. All they can say is no. I have gotton REOs for below the amount owed so it can be done.

Re: What should be offered on this REO? - Posted by phil fernandez

Posted by phil fernandez on June 01, 2006 at 11:28:12:

What do you mean by "actual value ". You better get someone in there that knows what has to be fixed up and at what cost. Without that knowledge you are not ready to make an offer.

If the bank foreclosed at $240,000, why are they looking for $340,000. I’d start at $240,000 and drop off quickly from that number. Property has been on the market for 4 months. That tells me something right there.

You need to do more research.

Re: What should be offered on this REO? - Posted by John Corey

Posted by John Corey on June 01, 2006 at 05:31:13:

Nothing until after you know more.

Otherwise the number is a random guess. You do not know if there is a toxic waste issue, if the place is in move in condition, etc.

If you wanted to offer 1 dollar (low ball offer) and you knew there were no hidden liabilities then make the offer.

Note that the bank will say TLC or ‘as-is’ if they want to avoid being responsible for things that are not correct. The idea being they really do not know and expect you to make your offer after you have figured out what might be right or wrong.

REOs can be a good deal. It will vary with the property.

You need to put some time into figuring out the condition.

John Corey

Re: What should be offered on this REO? - Posted by Praveen

Posted by Praveen on June 01, 2006 at 12:48:52:

Thanks Phil and John for the quick response.

Actual value means the actual comp. I am keeping an eye on this townhouse community and they are selling for 329K to 340K for the same size. House is just 3-4 years old.

Thanks again.

-Praveen

Re: What should be offered on this REO? - Posted by phil fernandez

Posted by phil fernandez on June 01, 2006 at 13:02:38:

Sounds like you might be in the drivers seat if they are owed $240,000. Tell em you’ll take it off their hands.