Normally, the banks set a price on properties too high because they are in the business of lending money, not real estate, and as a result often they do not have a good understanding of the real estate market. Also, most banks are large, they have specific policies on lowering the price on a house based on how long it has been on the market.
Realtors (especially REO realtors) play a different game than investors. All of them know what a property will probably sell for, but they have to give a high estimate of value or they probably will not get the listing. What the banks do is get a few realtors to give them what is called a brokers price opinion, which is nothing more than pics and their discounting the property for certain things. Bottom line: when everything settles, the bank tells the realtor what to list it for, so expect them to be high and do not let that stop you from making offers.
Well, go ahead and make low offers! You are the one with the cash so you have the power, so do not worry about what anyone else thinks. However, sometimes you may run into realtors who think they are the owner. They will discourage you from making the offer because it is too low. You will be the judge of that. If this realtor does a lot of REO business and is trustworthy, you may take their advice and try to build a relationship with them. But if you feel that you are not getting the best advice, you may want to politely remind them that they are required to submit all offers. Furthermore, if you think that for some reason the realtor is not submitting your offer (it happens, but very seldom; most are honest, there are a few bad ones), go to the broker and ask for the rejection notice from the bank.
What is the most important, make low ball offers! I typically start off every offer at least 10-20k below list price, unless it is listed for like 15k and I know they are not going to give it to me for a dollar.
In the case of one listed at 25 I would start no higher than 15k and see what happens. I may even start at 10k or lower depending on the house. But definitely low.
Making offers is what makes dreams come true and changes peoples lives! Start out low every time; when it comes to offers, it is always easier to go up than come down. - 16089
Realtors (especially REO realtors) play a different game than investors. All of them know what a property will probably sell for, but they have to give a high estimate of value or they probably will not get the listing. What the banks do is get a few realtors to give them what is called a brokers price opinion, which is nothing more than pics and their discounting the property for certain things. Bottom line: when everything settles, the bank tells the realtor what to list it for, so expect them to be high and do not let that stop you from making offers.
Well, go ahead and make low offers! You are the one with the cash so you have the power, so do not worry about what anyone else thinks. However, sometimes you may run into realtors who think they are the owner. They will discourage you from making the offer because it is too low. You will be the judge of that. If this realtor does a lot of REO business and is trustworthy, you may take their advice and try to build a relationship with them. But if you feel that you are not getting the best advice, you may want to politely remind them that they are required to submit all offers. Furthermore, if you think that for some reason the realtor is not submitting your offer (it happens, but very seldom; most are honest, there are a few bad ones), go to the broker and ask for the rejection notice from the bank.
What is the most important, make low ball offers! I typically start off every offer at least 10-20k below list price, unless it is listed for like 15k and I know they are not going to give it to me for a dollar.
In the case of one listed at 25 I would start no higher than 15k and see what happens. I may even start at 10k or lower depending on the house. But definitely low.
Making offers is what makes dreams come true and changes peoples lives! Start out low every time; when it comes to offers, it is always easier to go up than come down. - 16089
About the Author:
The author, Jesse Davis is an experienced wholesaler in the Jackson, Mississippi, Real Estate market. He has wholesaled over 80 properties this year alone, and he teaches a seminar on how to really be successful in today's market. Go here to learn how to find all the buyers you will ever need to build a massive monthly income in Real Estate today
