Making Offers on REO's and HUDs

[David Robertson]

What is your general strategy when making offers on REOs or HUD properties?

Do you typically make an initial "low ball" offer to see if they will accept it and then make your maximum offer price after that?

Interested to hear offer strategies and thought processes of making an offer?

I am currently looking at a REO that has been on the market for 240 days in decent condition, and the bank dropped the price from $120k to 90k with homes retailing for around $140-160k with upgrades. I am considering making an initial offer in the 60's. With my MAO at approximately 10% higher.

Is there such a thing as too low of an offer? I know it depends on the property, but how low have you guys offered from asking?

[Gregory Childs]

Same as Charles - I have a database or spreadsheet that I use to evaluate each deal. My offer is based on the what it tells me, regadless of the listed price - of course if the spreadsheet says more than the listed price then I take the lower figure (never happens, but just wanted to be sure you didn't think I was crazy).

It's not about low balling an offer - its about ensuring an acceptable return, regardless of the circumstances.

TTFN,

Greg