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Updated almost 16 years ago, 01/08/2009
REO deals by 12/31?
I read an article that quoted an un-named source saying that GE Capital is trying to get as much money by 12/31 as possible-even giving salespeople incentives to talk customers into refinancing to another company or close accounts--in stark contrast to how they've been trained to get people to borrow more in recent years.
Regardless if it's 100% true or not, I'm wondering if banks would be willing to accept less for REOs if an investor can close the deal by the end of the year and the bank can report cash on hand and 1 less REO?
Has anybody seen or heard of banks being more willing to accept lower offers on REO recently? It might be sinking in more as the year end approaches so it's probably in recent offers-not 2-3 month ago offers.
We're running the numbers and looking at making low offers on 3 REOs soon. I'm thinking we'll figure the numbers for our 'normal' low offer (15%-20% less than already lowered price) and then knock it down a couple thousand more to see if they accept with a closing date of 12/29 or so. I'll let you know how our experiences go.
Has nobody seen or heard anything about this? There was a Countrywide foreclosure that I have been watching, listed at $65k on 10/1, dropped to $60k then dropped to $44k on 11/21 (listed as a short sale this summer at $80k and turned down a $55k offer). Made an offer of $40k with a close of 12/30 this weekend so we'll see if they take it. Lowering the asking price that much that quickly smells a little like desperation.
Might be worth making some crazy low offers with a close date before year end and come away with some real deals.
At this point in time, I doubt any bank could actually close an REO sale by 12/31/08.
Thats the kind of price drop I look for. If it's a good deal, walk in offer 28K cash deal. The last Fannie I closed on, came with a requirement that it had to be closed within 20 days. I don't know why, but it was their requirement. There is no reason why you shouldn't be able to close within 20 days as long as you work with their title co.
I'm not sure there is an average. I would say a month would be quick. This time of year, people are going to be on vacation and distracted with personal business.
Note I'm talking about individual properties. No idea how bulk works. Please keep bulk discussions in the bulk reo forum.
Jon,
Vacation very well could be an issue that I did not consider. Seeing how it's the title co that is usually the hold up and I would have to think they are scraping by at would the work.
I don't care if the bank closes by 12/31 or not-that doesn't affect my plan at all. I'm interested in getting a better deal if the bank thinks it can get another REO off it's books by year end and agrees to my purchase price.
You make some very good points.
I'm based in Colorado. Until the Treasury bailout I was able to pick up small portfolios of 10 to 15 properties, closed individually. Since the bailout I can only get one here and there. My REO listing brokers all report a sharp drop in listings. My asset managers all think there will be a flood of new REO listings in the new year.
I'm watching the treasury plans with great interest.
I just had a fairly low offer accepted on an reo and my realtor did say he felt getting it off the books by year end was a factor.
It certainly can't hurt to try, as long as the number of reo's keeps growing they at least have incentive to bargain.
MAKE OFFERS RIGHT NOW!!!!
Are you in love with banks? I sure hope not.
Do banks want to own properties? Heck no.
Do they want them gone? Of course they do.
FYI on this, a bank REO manager I spoke with personally last week told me that for a property under contract with a cash offer on it prior to year end, he can still show it as sold on their books even if the closing doesn't happen prior to 12/31.
As for the offer amount, who cares? Not Me :)
We have just put in 12 offers.
One of them got accepted within 72 hours. The property (a 3/2, appraised at $160K) was listed at $113 and dropped to $97K a week ago. My offer was............ drum roll please....... a whopping $51K (don't ask me why, I just felt like it)....... Wednesday of this week..... ACCEPTED hehe haha, I'll take it :D
NEVER be afraid to make absolutely retarded offers, the worst they can say is no right?
Hi FL Flipper, boy do I like your style?? I wish your methods would work in St. Cloud!!!! No one seems to budge (banks I mean).
St. Cloud FL?
Yeah they will, how many offers have you presented?
Have they been on REO's?
Originally posted by FLFlipper:
Are you in love with banks? I sure hope not.
Do banks want to own properties? Heck no.
Do they want them gone? Of course they do.
FYI on this, a bank REO manager I spoke with personally last week told me that for a property under contract with a cash offer on it prior to year end, he can still show it as sold on their books even if the closing doesn't happen prior to 12/31.
As for the offer amount, who cares? Not Me :)
We have just put in 12 offers.
One of them got accepted within 72 hours. The property (a 3/2, appraised at $160K) was listed at $113 and dropped to $97K a week ago. My offer was............ drum roll please....... a whopping $51K (don't ask me why, I just felt like it)....... Wednesday of this week..... ACCEPTED hehe haha, I'll take it :D
NEVER be afraid to make absolutely retarded offers, the worst they can say is no right?
I just wish I can wholesale flip REO's like that.
Why can't you?
Originally posted by FLFlipper:
Because banks will no honor assignment contracts.
So? I know they don't but we still wholesale REO's. Just double close them!
Originally posted by FLFlipper:
How do you structure a double close with a bank and an end buyer?
The selling bank doesn't know (or need to know) anything about it.
You just close as per the deal but at the same time bring your buyers in and do a simultaneous closing with them on the spot, easy peazy.
Originally posted by FLFlipper:
You just close as per the deal but at the same time bring your buyers in and do a simultaneous closing with them on the spot, easy peazy.
Hmmm I might just try that.
LOl, you should, you'll love it!
I've probably put in about 12 bids over the last few months, not 12 in a week. Each time I got bumped out by higher offers, always hearing "highest and best". Cash did not seem to matter. I didn't offer less than 85% on any of them. Maybe i'm not researching enough? I'm doing the MLS search, Osceola county tax search, Osceola county property appraiser search and even the county records. I've got this research down to a science and it hasn't gotten me very far. BUT, you gave me hope......so now I'm going to spend the next few days researching a bunch of "maybe's" and I'll throw those low offers in and just see what happens. Do you make your offers through a broker you usually use, or do you go directly to the listing broker? Even trying to get a HUD broker with an NAID # to submit bids for me has sucked. They hear your offer and they don't want to bother with the paperwork.
One more question Flipper: Do you think you have better success with homes that are bank owned for a long period of time? I had thought this was be an incentive. I've chased one property for one year. The bank stays with the same realtor to market the listing and will not budge at all but they keep dropping the price $3000 a month (like that's going to do it in a house with no bathrooms, HVAC or even a kitchen).
Hey Ingrid
I should ask you first, are you in NJ (per your profile) or St. Cloud FL?
Also, are you using an agent locally in FL?
We just use our agent here in Orlando to make our purchases. We could indeed go straight to the listing agent thus allowing that person to get both sides of the commission but I sometimes find a property say late on a Thursday night and I know I can ask our agent to put an offer in that night and it will get done. I’m not sure the listing agent would act so fast so we stick with our own guy.
If you get an offer turned down, do you just get told it was a no and that’s it?
If that happens to us (very rare), I ask to see the “no†from the bank. I don’t want a selling agent saying no just because he couldn’t be bothered to put the offer in because it was very low, I want to see it in writing. That right there ensures the offer at least gets presented.
Each offer is always submitted as “All Cash†(even if it isn’t really) and we tell the bank we can close within 10 days.
As for the offer, I really don’t care what the bank wants. I won’t offer more than half of what the true value is and if the bank is already close to that number, I’ll still take 20% off their lowest listing price.
Yes, perhaps obviously, the longer a property has been listed the more chance you have at getting it at a great price. I track a ton of properties and watch the drops to see the pattern etc. before making a move. If someone else buys it, oh well, I didn’t really want it anyway but I will at the right price.
We ALWAYS have multiple offers out there. The worst a bank can say is no so who cares?
AND, we have had cases where a bank has said no and then came back to us three or four months later and said OK, we’ll take your offer (to which our reply is “well that was then and this is now, our offer is now 20% less than it was back thenâ€, take it or leave it)
If you are using an agent or even if you are using the MLS yourself, you should be set up to get daily email alerts of price drops, new listing etc. It save a lot of time searching when you can set this all up one time and have it come to your in box daily with any changes.
Having said all of that, I really don’t see much in St. Cloud at all as far as REO’s are concerned which is why I am wondering why you want that area. The rest of the county doesn’t interest you?
What about Orange County?
If you can fill in some of the blanks about if you are using as an agent, if you are getting copies of rejections, why that area, what you want to do with the properties etc. I can probably help you a little further.
Have a good one.
Mark
FLFlipper, what happens if your buyer doesn't show up at the double closing (heart attack, traffic accident, changed mind, simply late, etc., etc. ) do you have a backup plan? Jim
Well, you would have already collected a deposit from him (we get 2 grand) so a) you are already up a grand and he loses his deposit
b) delay the closing (if your buyer is laying in the street somewhere half dead that won't be a problem)
c) Sell it to someone else because you would have normally had a back-up buyer ready)
d) Walk away from it and you still made $1K profit
HI Mark, I sent you a PM with all the info you requested. Didnt want to clog up the boards. Ingrid