Normally, the banks set a price on properties too high because they are in the business of lending money, not real estate. A lot of times they simply do not have a clue. Also, most banks are large and have specific policies on how they lower the price on a house based on how long it has been on the market.
Realtors' (especially REO realtors) position is different from the investors'. They know what a certain property will most likely sell for, but they have to give a high estimate of value in order to get the listing. The banks get some realtors to give them what is called a broker's price opinion, which is nothing more than pics plus their discounting the property for certain things. The bottom line is when everything settles, the bank tells the realtor what to list the property for. Expect the listings to be high but do not let that stop you from making offers.
So, make offers! And make them low. Do not worry about what anyone else thinks; you are the one with the cash and buying, so you have the power! The only thing that you may run into every now and again is realtor who thinks they are the owner; they will tell you that the offer is too low, or even discourage the offer. You have to judge this. If this is a realtor who does a lot of REO business, I mean one of the big ones, you may take their word and try to build a relationship with them. Other times, you may want to politely remind them that they are required to submit all offers, and if you think that for some reason the realtor is not submitting the offer (this happens, but very seldom. Most are honest, there are a few bad ones) then go to the broker and ask for the rejection notice on the offer from the bank.
What is the most important, make low ball offers! I usually start off every offer at least 10-20k below list price, unless it is listed for like 15k and I know they are not going to give it to me for a dollar.
For example, if the property is listed at 25, I would start no higher than 15k and see what happens. I may even start at 10k or lower, depending on the house, but definitely low.
Making offers is what makes dreams come true and changes peoples lives! Always start out low; when it comes to offers, it is easier to go up than come down. - 16003
Realtors' (especially REO realtors) position is different from the investors'. They know what a certain property will most likely sell for, but they have to give a high estimate of value in order to get the listing. The banks get some realtors to give them what is called a broker's price opinion, which is nothing more than pics plus their discounting the property for certain things. The bottom line is when everything settles, the bank tells the realtor what to list the property for. Expect the listings to be high but do not let that stop you from making offers.
So, make offers! And make them low. Do not worry about what anyone else thinks; you are the one with the cash and buying, so you have the power! The only thing that you may run into every now and again is realtor who thinks they are the owner; they will tell you that the offer is too low, or even discourage the offer. You have to judge this. If this is a realtor who does a lot of REO business, I mean one of the big ones, you may take their word and try to build a relationship with them. Other times, you may want to politely remind them that they are required to submit all offers, and if you think that for some reason the realtor is not submitting the offer (this happens, but very seldom. Most are honest, there are a few bad ones) then go to the broker and ask for the rejection notice on the offer from the bank.
What is the most important, make low ball offers! I usually start off every offer at least 10-20k below list price, unless it is listed for like 15k and I know they are not going to give it to me for a dollar.
For example, if the property is listed at 25, I would start no higher than 15k and see what happens. I may even start at 10k or lower, depending on the house, but definitely low.
Making offers is what makes dreams come true and changes peoples lives! Always start out low; when it comes to offers, it is easier to go up than come down. - 16003
About the Author:
About the author: Jesse Davis is an expert wholesaler in the Jackson, Mississippi, Real Estate market. He has wholesaled over 80 properties this year alone, and he teaches a seminar on how to really be successful in today's market. Go here to learn how to find all the buyers you will ever need to build a massive monthly income in Real Estate today
