When researching properties and looking at real estate comps many Investor’s come across REO’s or bank owned homes. Bank REO foreclosures are the safest forms of foreclosed properties. This is, in some ways, true. However, getting an offer accepted might not be easy since a lot of investors are interested in these same properties. To improve your chances of getting accepted, be sure the price is a good fit.
And just how do I do that? Glad you asked! Once you’ve researched the real estate comps information, it’s time to put an offer on the home. The offer price should not be too low that the bank will not even look at it. At the same time, it should not put too much strain on your portfolio. The acceptable offer price is usually 20% below prevailing market values. To get that amount, use InvestorCompsOnline to research the prices of similar homes in the neighborhood and make an offer that is at least 20% lower.
Another useful formula is to come up with an amount halfway between the average market price for similar dwellings and the asking price for the bank REO foreclosures being sold. Be sure to provide enough flexibility to your offer since it is likely that the first one will be rejected. If you really want the property, have a ceiling price that will allow you to go a bit higher and provide you with more room to haggle with the bank.
Also consider this: one way of getting an edge over other bidders is to have the payment cash-ready. Banks favor cash payments over other types of payments. If similar amounts are offered by multiple buyers, the one with the cash will likely get the property. A pre-approved mortgage package is another great negotiation tool to have when trying to acquire an REO property. It is to be expected that banks would require proof that the buyer will have the means to go through the whole process and pay for what he/she is expected to pay.
Making an offer for bank REO foreclosures entails a lot of work. Staying focused and doing your research with InvestorComspOnline can prepare you to reap the benefits of your labor.