Countering with a BoA property?

[Casey S.]

Was wondering if anybody might have some tips for me?

Ive purchased a number of REOs but they have always been fresh listings that were good deals the day they hit the market. Offers were usually close to or above asking price. This is my first one to try to work thats been sitting stale for a while. Listed mid January for 151,500, two reductions since down to 139,800, last reduction was three days ago. I offered 119,100 and they responded within 12 hours with 137,900. I countered at 120,000. I am comfortable going up to 124,000. Hindsight I probably should have started lower. Once they counter back should I play the $500 and $1000 at a time game as long as I can and will they even play that game or should I just tell them highest and best is 124,000 and stop wasting everyones time?

Or is trying to deceifer any ryhme or reason to their process pointless?

[J Scott]

First, while there may be a rhyme and reason to their negotiation, trying to figure it out is probably futile (the one rule of thumb that seems to work for me is that the second counter-offer from the bank tends to be the biggest price drop and also tends to be close to their bottom line).

In my experience, going back and forth in small increments is about as equally as effective as just putting out your best offer and tell them to take it or leave it.

That said, the big advantage/disadvantage to the "small increments" negotiation option is that you stretch the negotiation out over a longer period of time. This can either hurt or help you:

- It hurts you if the bank gets another offer in the time you're going back and forth...you now have competition whereas you wouldn't have if you had done the take it or leave it earlier on;

- It helps you if the negotiation stretches over a several days/weeks and the bank doesn't receive any other offers in that time period...they realize that you may be their best shot.

So, you need to factor the likelihood of other offers coming in during your negotiations...