Man, for a supposedly hot real estate market, I sure am getting a lot of callbacks on houses that haven't sold. Today, the agent for House 7 called me to tell me the price has been lowered to $49,900. This is an REO condo and my original offer was $39,700. I told the agent I couldn't go much higher than that and thanked him for his call. He claimed the bank had an appraisal done and it came back higher than the current listing price, but they didn't tell him what it did appraise for. I do believe the appraisal was higher, since my comps put it in the $55,000 range, but I don't believe he doesn't know what the actual figure was. This guy also said he didn't remember what my original offer was and this has to be a lie since the only way he would have had my phone number was if he still had my offer.
But I do take a small amount of joy in the fact that this place hasn't sold yet. My offer for this property had the honor of having the quickest rejection time so far - 1.25 hours. As I wrote at the time, I think there is someone at the bank thinking they are doing the bank a favor by holding out for top dollar. The defaulted loan on this was for only $25,000, so my offer would still allow them to make money. Now another month has gone by, the bank has had to pay another $120 in HOA fees, pay for an appraisal, pay another month of property taxes, and it still hasn't sold. Maybe next month, they'll drop the price again.
Friday, March 18, 2005
House 7 Callback
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4 comments:
My oh-so brief experience with bank REO's is exactly opposite of what gurus espouse. What I have seen is that while every bank has its own rules regarding REO's, most hold tight to their asking price.
I currently have two REO offers still on the table from over a month ago. One dropped their price 5%, but is holding firm at their new price. The other dropped their price a whopping 1% ($250k to $247.5k). I submitted counters on both, but neither wants to negotiate further.
The gurus will tell you banks hate REO's and will do whatever they can to get them off their books, but I sure haven't experienced that at all!
Hi Shaun,
I have enjoyed reading your blog very much and I appreciate you posting your adventures for the world to experience.
I am writing to ask, if you would not mind sharing, how it is that you were able to find and recruit willing investors for your company.
Thank you very much,
Peter Ferrigan
admin@352hosting.com
http://www.352hosting.com
Steve - I agree. Of course, if it was easy, everyone would be doing it. I think a lot of a bank's willingness to deal has to do with how long they have had the property on their books. Obviously, the longer, the better for investors. It's all a numbers game and I think we investors can afford to wait longer than the bank. Just keep checking back each month or, if you are lucky, they will call you back!
Peter - I got investors basically through word of mouth, friends of the family and such. Don't underestimate word of mouth. My mother told her CPA what I was doing and the CPA wants to stay informed of my progress. If it goes well, she said she knows some people who would also like to invest with me. So don't be ashamed or embarrassed to tell people what you are doing. You never know where it might lead!
My quickest rejection so far was 35 minutes from when I sent the fax to when the guy called me back and told me I was crazy...
I enjoy reading these REI blogs, it's motivated me to start my own, for the sake of accountability...
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