Buying Bank Owned Real Estate In Phoenix
There are times when I wish that there were not so many infomercials selling get rich quick in real estate programs with no risk and no hassle.
If what these infomercials are selling were true...we wouldn't be having the downturn in the real estate market that we are currently experiencing.
As you know if you have read other blogs of mine I sell real estate in the Phoenix Valley. One of my clients is a bank. When a bank forecloses on a customer and becomes the owner of the foreclosed property they will hire an experienced professional Realtor (like myself) to sell the property for them.
Per yesterdays blog when a bank puts real estate up for sale they do two things very differently than a typical seller. First, the price is based on nearby, recent comps...not on what they owe on the property (it can be higher or lower) or on what they feel like they deserve to get for the property.
The second thing that they do differently is that once they have established comps they will price their Phoenix real estate just under those comps so that that it will attract a buyer quickly and for close to list price.
Banks do not want to own real estate, but they will also not sell real estate for less than what they believe the value to be.
If you do want to buy bank owned real estate or REO properly in the Phoenix Valley, here are several tips that can help you negotiate a great deal.
1. Banks to not respond well to a low ball offers. Remember banks have determined the list price on their homes based on comps. When they receive an offer that is more that 20% below list price they will usually counter offer at $5,000 below list price. When you make an offer that is completely out of the ball park, the bank will not consider you a serious buyer.
2. Banks will always counter your purchase offer...regardless of what it is. Unless you make a full price offer with 20% down and a quick close of escrow...the bank will counter your first offer.
3. Banks will continue to counter offer until there is an agreed upon price. A bank will counter offer for as long as the buyer is willing to counter offer. Banks do have a set dollar amount they will not go below...so they could counter offer with the same offer they have sent you before, but they will always counter offer.
4. Banks do not negotiate like people. They are not emotionally attached, they do not get tired of counter offering a contract, they do not get offended, and do not find the process emotionally draining.
If you are interested in buying a bank owned property or REO real estate in the Phoenix Valley, remember several things. A bank will sell a property for what they perceive market value to be...not less. With that in mind...because they price their homes aggressively...you can buy some great real estate deals!
If you are interested in buying or investing in bank owned real estate or REO property in the Phoenix area...call me!
Date: 2008-06-24 17:44:08
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