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The Unsettler
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Foreclosure and Bank protocol
Have a new co-worker.
He needs to relocate into the area. Found a house he likes. Bank foreclosure. House has been on the market at least 6 months. He made an offer, low of course and the response was the bank is going to pull the house off the market, do some work and come back out at a higher asking price. Sounds like odd behavior from a bank? Is this common? House is currently listed for 75% of surrounding comps. Subdivision is only 3-4 years old so no disparity between this house and the comps. Other houses on the block have been moving pretty quick, no reason this one is still sitting especially at the current pricepoint. I get the feeling the listing agent is playing games to get a shot at a flip.
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"I want my two dollars" "Goodbye and thanks for the fish" "Proud Member and Supporter of the YWL" "Brandon Won" |
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Unoffended by naked girls
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I always thought that the normal response to an offer was a counter-offer?
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Dan 1969 911T (sold) 2008 FXDL www.labreaprecision.com www.concealedcarrymidwest.com |
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I've heard that in bank foreclosures, they've already priced the house below market. Usually no counter offer, they just wait for the next guy to come along and bid.
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--------------------------------------------------------------------------- "There is nothing to be learned from the second kick of a mule" - Mark Twain |
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not as smart as I think
Join Date: Oct 2006
Location: Northern California
Posts: 769
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If the offer is viewed as reasonable, a counter may occur.
If the offer is viewed as unreasonable, they may choose not to respond. This becomes problematic because you end up chasing the price up. If you come back, the seller knows you want the place and they are now in the power position. At least that is how it works in commercial real estate.
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1978 911SC stock-SOLD 1985 911 Carrera Stock Last edited by Steve Viegas; 02-05-2009 at 12:02 PM.. Reason: need to read what I write before I post... |
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Capitalist and Patriot
Join Date: Sep 2006
Location: Freedomville
Posts: 1,923
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Good insight here guys
FWIW I'm in this industry and have been doing quit a bit of these REO deals including possibly picking up a few for myself. For a Bank to say they are going to invest their own money to fix up the place is extremely rare. As in I've never ever heard of that one before. Most likely the REO asset manager is posturing or playing games... I've found many of these Asset managers to be a PIA But thats part of the process, I've told my clients; Think of it this way: their time they are spending in the REO buying process, the back and forth or lack of, the posturing of the REO asset manager etc. will be rewarded if they buy at 35% BELOW market. It can be a game of chess, and you have to be unemotional & willing to walk away if you are feeling like the process isn't being treated with professionalism. REO buying is nothing compared to a short sale, now that's a real PIA process
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Former Test driver & Production Manager Singer Vehicle Design 2009 Cayenne GTS, '81 911SC RoW Targa (lot's of goodies), '86 535csi, '84 633 csi (turbo charged-sold) ![]() ![]() "Dream it, Believe it, Decide it, DO it " |
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Unconstitutional Patriot
Join Date: Apr 2000
Location: volunteer state
Posts: 5,620
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Bank is bluffing or listing agent/broker is doing so by proxy. If you are indeed working with a listing agent instead of listing broker, he likely has not even two quarters to rub together. If he's a player in real estate, he would not be talking. He'd be doing.
Your friend must decide if he really wants this house. If the house doesn't need work, and truly is 25% under current market, he could raise his offer. On the other hand, if he is not emotionally attached to the house or the deal, he could sit and wait, or make another lowball offer, knowing he may have to move on. It's good to know what your counterparty wants, but in this case, it's nearly impossible. Banks are flippant and irrational. Don't dwell on their motivations and intent. It would be like trying to understand women. |
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The Unsettler
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Thanks guys.
Pretty much what I thought.
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"I want my two dollars" "Goodbye and thanks for the fish" "Proud Member and Supporter of the YWL" "Brandon Won" |
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Former Drama Queen...
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My offer for a bank owned home was just accepted. The bank originally countered my offer with the asking price but I held firm on the original offer. I have a home inspection Monday. Hopefully no major issues will be found and I will move into the house in a month or so. Wish me luck.
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~ Kim (KDOLL2) It is better to cry in a Porsche then in my Vue... |
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That's great news, Kim. I hope the PPI turns out OK. Good Luck!
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Registered
Join Date: Mar 2004
Location: To Be Determined MI
Posts: 661
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Anyone have insight on the 'no disclosures' thing? I thought that this was law?
I've immersed myself into this game over the last few weeks and have seen some funky schit from banks and agents. There may be money to be made out there but the rules of the game don't seem to be transparent. Kinda like on the playground as kids when the mean kids would just make up their own rules as they liked.
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Unconstitutional Patriot
Join Date: Apr 2000
Location: volunteer state
Posts: 5,620
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Disclosure implies the bank has prior knowledge of the home. The banker can't manage to write good loans, much less keep up with the age of components and water leaks. Buyer must beware. Unfortunately, some will jump in with outrageous bids that do not reflect the risk of foreclosures. If no where else, this arena rewards the patient.
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Join Date: Mar 2004
Location: To Be Determined MI
Posts: 661
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Do water bills owing, condemnment status, special permits required get disclosed on these deals? Doesn't the listing agent have pretty easy access to this info?
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Unconstitutional Patriot
Join Date: Apr 2000
Location: volunteer state
Posts: 5,620
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Depends on whether the listing agent is willing to do any work (many times that is NO). Make friends with helpful ladies at City Hall and the local County Courthouse where you can do research. If you're willing to do the work, you're weeding out the competition (ie. potential buyers). You could consider that an advantage.
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Registered
Join Date: Dec 2002
Location: Worcester County, MA
Posts: 853
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Don't assume anything ... verify everything. listing agents for REO properties as a rule will not do research for you...I bet the listing has a line somewhere that Buyer to verify all details and usage...or some such.
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Join Date: Mar 2004
Location: To Be Determined MI
Posts: 661
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BATVAI, somewhere in every listing.
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Registered Cruiser
Join Date: May 2004
Location: Pursuing Happiness
Posts: 3,892
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Have another 'friend' go in with a lower offer.
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87' Carmine Red Carrera - Keeper 82' Silver SC - Sold 79' Gran Prix White SC - Sold 05' Black C2S - Daily driver I have never really completely understood anything. |
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Registered
Join Date: Aug 2007
Posts: 105
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Just a question of note, if a house is in foreclosure status does it need court
approval before an actual sale can be solidified or can a bank sale the house off without any court mandate? |
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Join Date: Mar 2004
Location: To Be Determined MI
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not court approval, just the bank's approval
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Does this mean the court has no say in the matter of a sale? Are all sales of bank foreclosures governed by the same laws in all states? Just wondering the laws
in America as all foreclosures in Canada need a court to sign off on them. Thanks all |
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Join Date: Mar 2004
Location: To Be Determined MI
Posts: 661
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If you default on a mortgage then the bank can sell your (the mortgaged property) property. No court involvement whatsoever. If you start talking BK, well that's a whole nother story.
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