In the world of REO properties, known as real estate owned properties, lots of things happen behind closed doors. Banks take bids from several different real estate agents and ultimately settle on what they call “the highest and best offer” for each property. What does this mean for a prospective homeowner’s chances of walking away victorious with a great deal on the house of their dreams?
The inner workings of the bank are not rocket science. They look to get the most money possible for their REO properties. They also want to be sure they are dealing with financially stable buyers that have submitted legitimate offers. They don’t want to turn down a high offer from a sure thing. Similarly, they don’t want to take a low offer from a dependable buyer and bypass an individual that would have paid more.
How do you make sure the bank picks your offer over any other offers on the same property? There are no surefire rules. However, some offers are always better than others. If a bank tells you they are looking for the highest and best offer, reevaluate your bid.
Banks want the highest and best offer they can get. They want to make a decision quickly and without counter offers; which may cause a delay. Did you offer enough money? No one knows for sure except for the officer sitting behind the desk at the bank. They didn’t jump at your offer right away. Instead you were told they needed a bit more time to decide if it was the best they could do.
What should you do when the bank says they are going to wait for the highest and best offer possible? That depends on a few different factors.
How much was your bid in comparison to the true market value of the house? What was its previous selling price and how much are comparable houses in the same neighborhood selling for now?
Also, how much do you want the house? If you want the house badly enough to overpay slightly, by all means bid to your heart’s content. If value is more important to you, consult an expert.
A trained and experienced REO real estate agent to negotiate with banks ensures you make all the right moves throughout the entire process of negotiating with lenders. The bank may say they are waiting for the highest and best offer possible, but a good real estate agent will tell you when you’ve already made the highest reasonable offer on a property.
Good advice is your best asset. If you want to navigate the process on your own, you’ll have to sweat it out and be willing to lose out on some of the best REO properties the bank has to offer; unless you’re willing to bump up your bids a bit. Banks have the ball in their court. Some work exclusively with real estate agents and not the general public.
In a market with high demand for REO properties, like San Diego for instance, you’ll want a good real estate agent by your side. Dealing with banks is an intricate process and an agent with contacts on the inside is invaluable. Evaluate your bids carefully and seek the help of a real estate professional if you are serious about buying a REO property.
Kari Shea is a real estate professional with Shea Real Estate & Investment Groupwww.shea-realestate.com.
[tags]REO properties,San Diego,real estate owned properties,bank owned properties[/tags]
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