Most of the time, the banks set a price on properties too high because they are in the business of lending money, not real estate. A lot of times they simply do not have a clue. Also, most banks are large and have specific policies on how they lower the price on a house based on how long it has been on the market.
Realtors' (especially REO realtors) position is different from the investors'. They know what a certain property will most likely sell for, but they have to give a high estimate of value in order to get the listing. The banks get some realtors to give them what is called a broker's price opinion, which is nothing more than pics plus their discounting the property for certain things. The bottom line is when everything settles, the bank tells the realtor what to list the property for. Expect the listings to be high but do not let that stop you from making offers.
So go ahead and make offers! Make them low. Do not worry about what anyone else thinks; you are the one with the cash so you have the power! The only thing that you may run into every now and then is realtors who think they are the owner. They will tell you that the offer is too low, or even discourage the offer. You will be the judge of that. If this realtor does a lot of REO business, you may take their advice and try to build a relationship with them. Otherwise, you may want to politely remind them that they are required to submit all offers, and 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), then go to the broker and ask for the rejection notice from the bank.
Most importantly, make low ball offers! I usually start out every offer minimum 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.
For example, if the property is 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! Always start out low, in the case of Offers it is easier to go up than come down. - 15224
Realtors' (especially REO realtors) position is different from the investors'. They know what a certain property will most likely sell for, but they have to give a high estimate of value in order to get the listing. The banks get some realtors to give them what is called a broker's price opinion, which is nothing more than pics plus their discounting the property for certain things. The bottom line is when everything settles, the bank tells the realtor what to list the property for. Expect the listings to be high but do not let that stop you from making offers.
So go ahead and make offers! Make them low. Do not worry about what anyone else thinks; you are the one with the cash so you have the power! The only thing that you may run into every now and then is realtors who think they are the owner. They will tell you that the offer is too low, or even discourage the offer. You will be the judge of that. If this realtor does a lot of REO business, you may take their advice and try to build a relationship with them. Otherwise, you may want to politely remind them that they are required to submit all offers, and 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), then go to the broker and ask for the rejection notice from the bank.
Most importantly, make low ball offers! I usually start out every offer minimum 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.
For example, if the property is 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! Always start out low, in the case of Offers it is easier to go up than come down. - 15224
About the Author:
The author, Jesse Davis is an expert 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. Click here to learn how to find all the buyers you will ever need to build a massive monthly income in Real Estate today
