Buying a short sale Condo: How to price offer?

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condo_seeker,



I have put offers in on shorts and REOs both, although this was last year, and things have changed a bit. Trying to get a short done is a serious pain in the butt. In my experience, the bank doesn't care about your difficulty in purchasing the short home. They are going to do their own internal price opinion, once they get time, and if your offer comes up short of that, they will likely not allow the sale. Save yourself the headache and wait for the property to become REO. Once the bank gets around to finally marketing the REO, they most usually take the offered price, no fuss, no muss. Last year, lenders weren't as anxious to move their NPA, but it sure seems like this year its a different story. Many REOs are coming online with aggressive pricing and getting into escrow very quickly.
 
Most buyers in today's market, want a "deal" (understandably so) - whatever they perceive that to be. Their perception is that they will get the best deal buying a Short Sale or an REO, so a lot of the focus in the market, is on those properties. Many buyers are in no hurry to move, so they feel comfortable waiting out a Short Sale decision. Also, plenty of buyers submit offers on more than one property.



Not every failed Short Sale goes back to the bank. Sellers work out a note modification or they just decide to stay, for whatever reason. Not every Short Sale seller is behind in their payments, either.



Sure, you can wait for a property to be an REO. The only potential downside other than that the property never gets to be an REO, is that the property is trashed and/or gutted.
 
I have submitted offers on several Irvine REOs, in the last couple of month, and was told I was in multiple offers on all of them - 12 was the highest # of offers I heard. I know of a couple that went over the asking price, while others went below or at the asking price.
 
[quote author="IrvineWorker" date=1207486283]I have submitted offers on several Irvine REOs, in the last couple of month, and was told I was in multiple offers on all of them - 12 was the highest # of offers I heard. I know of a couple that went over the asking price, while others went below or at the asking price.</blockquote>


you are in the same boat as I am.



I made 8 offers on REOs last 3 months. All of them had offers higher than asking price....

I was suprised lots of buyers are still offering higher than asking price for Irvine.
 
How do you folks know that you are really in a multiple bidder situation when you were trying to buy a reo? Did they actually closed above the asking price when you track the reo properties that you bid in the past?
 
skek, thanks for stepping in and making a great comment. You have the foreclosure process down. I will add two things, one to hit the point hard, and the other is a change of the market.



<em>When a bank forecloses, the property is auctioned off on the courthouse steps at a trustee?s sale. You can bid for it there, but you typically need to be an all cash buyer.</em>



Very true. You need a cashiers check, or checks for the amount you want to bid. They do not accept anything else, period.



<em>Lately, no one has been bidding on these properties, so the banks take them back by bidding the amount of the debt.</em>



This is 50/50 right now. The banks are starting to get tired of being property owners. So, some are dropping the minimum bid amount anywhere from $100k to $300k below the NTS amount. Not all have stopped snorting the Kool-Aid powder, but the ones that have, are trying to get bid at the foreclosure auction. It is too bad the bull, er bulls are too busy posting fact less drivel on Lansner's blog to realize the severity of this, and the "deals" that can be had. Although there are a few actually bidding, but they are pros, and maybe 5 of the 200 a week will find a buyer other than the bank.
 
"Save yourself the headache and wait for the property to become REO."



What's the difference if you wait for the short sale to be approved or you wait for the property to become an REO. Either way, you're waiting. In the former situation, you're the buyer; in the latter, you may not be.
 
Have you tried the search function?!?



I don't mean to be rude, but many people have been posting here about such topics for well over a year. While folks are kind enough to share their knowledge, it takes time to type it all out, and you are certainly not the first to ask. So to type it all out repeatedly when the information is readily available within five minutes is asking a bit much of people.



If one utilizes the search function, one would find a wealth of information, such as the thread here: http://www.irvinehousingblog.com/forums/viewthread/972/
 
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