Question on an REO Listing & Offer

[Ingrid Nagy]

Hi all, I've been looking at a single family 4/2 home 8 yrs old in an HOA in the Orlando area. The current asking price is 95K, REO owned and vacant. It appears to need cosmetic work but not much more. The last REO deal I did was in 1996 so I'm not up on the latest trends and the positions of banks nowadays. Similar homes are currently up for sale from 120-140 but nothing seems to be moving. Prices are dropping about $5K per month on average.

This particular home was acquired in 2006 for $275K. Owner did a no money down deal, defaulted and now the bank has it. It was previously listed for 90 days at $129K with another realtor. The current realtor picked up the listing at an asking of $95K.

I made a verbal offer of $65K cash closing in 10 days. The realtor laughed and said that is the value of the land, blah, blah, blah. If she was even to present such an offer she is fearful that the bank will pull the listing and put the house up on the auction block. I've never heard of such a thing but not wanting to offend anyone I let it lie.

I didn't think that my offer was that unreasonable but what do I know about current market conditions eh? In 1996 I bought two condos for $30K each from an REO, rented them and sold them 9 yrs later for $160K each. Am I still dreaming of 1996 or have things changed from the last cyclical downturn??

Ingrid