Making an offer

[Dustin Lyle]

I've been looking at an REO condo in the much beaten up Tampa market.. After sleeping on the idea, I've decided I'm going to put in an offer.
The average condo sale price in the neighborhood in the past 6-months is $97/sf.. The unit itself is 897Sf. The pictures taken in December of the unit show that its still in great condition with all working appliances including washer and dryer. (Though the kitchen appliances could be updated) Now the hard number.

The bank is asking $28,900.

I know a guy who was buying them 6 months ago with offers of 40-50% of the ask.
I'm just looking for the general consensus as to what YOU would offer given the numbers and your only intention was to buy equity. I will be paying in cash.


Dustin

I know there is plenty of information on the topic, But the market changes day to day... An offer that would be the "norm" six months ago, isn't necessarily the "norm" today... So I guess my question has nothing to do with this individual deal but more or less, Where is the REO market at as a whole today? And if any of you in Tampa have some concentric information that would be GREAT!

[J Scott]

A couple things:

- First, if the comps are really in the mid-$50K range, and the bank is only asking $29K, then one of two things is likely: 1) it needs more work than you believe; or 2) the deal is already gone...

- If the comps are really in the $50K+ range with only $2-5K needed in repairs, why would you bother to low-ball the bank when you can offer full-price and still have $20K+ in equity? You can bet that if your numbers are correct, someone else will be offering full-price (or above).

- If you're going to put up an FSBO sign and move in, why don't you just work to resell it. Get a realtor, do some minimal staging, and if the numbers you quoted are anywhere near correct, it will sell quickly and easily, and you won't have to waste your time moving in. Then take your profits and move on to another.

- In answer to your question, no, it's not likely the bank will accept an offer that is 40% of list price. Why would they? If the deal is as good as you say, there will be investors lining up to pay near full price.