Posted by Berno on June 09, 2006 at 16:17:08:
I agree with Gerald. In my area a nice REO home will sell through a realtor at the same price it would have if Joe and Sue Smith owned it. If I find an REO that has been on the market a while, or needs a bunch of TLC, I’ll go in and shoot an offer pulled from air. If I remember correctly, I have made offers as low as 31% of list price, which happened to be less than 25% what the bank loaned on it.
My rule (which changes at times!) is to do my research and come up with a max price I am willing to pay. My first offer is obviously lower than that…low enough that I should end up where I want to. I have gotten some great deals this way and I have also missed out on a great house where I wouldn’t pay over 200k and the lowest they went was $201,500. Decide what it’s worth to you, MAX and go from there. The % isn’t really that important.
What to offer? percentage? - Posted by Paul
Posted by Paul on June 08, 2006 at 17:26:07:
I realize that you can offer the bank anything you want on REO’s. What would be a good scale to base my offer to a bank owned property? Would it be 70%,75% etc. of the comps in the area?
Re: What to offer? percentage? - Posted by gerald(tx)
Posted by gerald(tx) on June 08, 2006 at 18:06:32:
Beginning investors look for percentages to find their answers. It’s not that simple. What is the value of the property? What is the market? Is it offered directly from the bank or thru a realtor?
In my area, a newer, highly desirable property offered thru a realtor will fetch almost 100% of FMV, while banks are happy to get rid of the low income junkers at 50% or less.
gerald
Re: What to offer? percentage? - Posted by IB (NJ)
Posted by IB (NJ) on June 08, 2006 at 18:04:21:
Your formula should be the same regardless of WHO is selling the property:
70% of ARV - Repairs = MAXIMUM Allowed Offer