Your Take on the Short Squeezes From the Banks

[Account Closed]

This is something I suspect many are seeing more and more. It is the case in my investing area, and I have people in other parts of the country reporting the same thing.

The banks are apparently switching gears and instead of asking for the principal or close to it when listing REOs they have realized it isn't feasible to move properties. The must have seen our strategies working, and adopted it to a degree.

What they are doing is simply making their list prices in line with a the traditional price an investor like myself would offer.

Sounds great, right... I could just offer their ask or about that and I'm having high acquisition rates?

Wrong. Why they are successfully doing is creating a feeding frenzy on the properties. You have a combination of retail + investors (and some new investors who get wrapped up in like a retail buyer) who target the property.

The bank simply tells you they have a offer in at X, and they keep everyone bidding and moving up their offers. The shrewd buyers get out of the way, but you have the "auction effect" takeover at least couple bidders rational and run up the final price 15 - 20% over list.

It is like the boom all over again on some of these, albeit at a much lower price point, but the price action is there.

So I want to get your take on it? Are you experiencing such tactics in your area? What are you perceptions.

I think they are trying to build the perception the market is getting back on fire and the deals are almost gone, last chance kind of mentality. Most retail buyers don't realize the amount of foreclosures in progress, and the REOs they actually have that aren't even on the market to prevent flooding it with supply and driving their prices down, nor that the moratorium will be lifted and the supply with be plentiful for a while.

If you are experiencing similar things, how are you dealing with it and what is your outlook for this?