Developer · NJ · Member since 2008 · 26 posts · 0 votes
Hi all, I am currently looking a property that is REO. The property needs rehab and no tenants currently live there. I know prices vary all over the board, but I was wondering how much flex do bank REO's have price wise typically?
The property I am looking at in NJ was being listed for 85k and just recently I noticed that the bank dropped the listing price to 80k. I took a look at the property this week and it definitely needs work. I am going to see this week if I can head into town and talk to someone at maybe to construction department to find out exactly why its uninhabitable aside from the kitchen and bathrooms needing work. I am assuming that the city should have this information considering the bank says the house isn't green.
Residential Real Estate Agent · Chandler, AZ · Member since 2009 · 1k+ posts · 928 votes
17y
fcastro-
It depends on how motivated the banks are, but don't let that sway you from making offers. I've had banks come down over $50,000 on $150K listed properties.
Developer · NJ · Member since 2008 · 26 posts · 0 votes
17y
Thanks for the feed guys. The bank just changed agents this past week. I asked him how many days the property had been on the market and he said he didn't know. This agent just had one of those faces that he didn't want to be working in this attitude.
The agent asked how we would be paying for the repairs. Said that banks are not willing to finance properties that include fix up costs, especially since this property wasn't green yet. I guess that makes sense and I would actually use cash on hand to fix up the place (I am estimating materials at 25k) Labor costs I will be eating since I along with my father in law would be handling the fixes.
Developer · NJ · Member since 2008 · 26 posts · 0 votes
17y
I had never heard of the term "green" either but my fiance pointed out that she heard it a few times while taking real estate courses. I guess the scale is red, yellow and green for housing here in jersey. I am sure red means there is basically no certificate of occupancy. Either the city deemed the place uninhabitable or the banks inspectors did?
Not really sure who has flagged this place as uninhabitable yet. I have to do so more research with the city I guess.
Hard money is an option I may have to explore. But all this will of course depend on whether I can get a mortgage on this property in the first place. I have the cash funds for a down payment and for the repairs but I would prefer to not use my money on the repairs considering I will be carrying the place for a few months while I fix it.
Scottsdale, AZ · Member since 2008 · 342 posts · 15 votes
17y
Every bank is different, and every REO deal within that bank is different. So don't expect a set percentage that the bank will accept. You just need to put in a low offer to see if the bank is willing to play the game. If they counter at full price or just a bit lower, then you know that they are not interested in taking a huge loss at that time. If they counter back a lot less, keep the countering going until you meet in the middle and below your cap of course.