Will the bank will take less than list price?
When a bank owns the property, they set the price. Generally, they do a BPO (broker price opinion) to assess the current market value of the home, and depending on each bank’s individual philosophies, price it how they see fit. Some banks price just under market value to make it attractive. Others price properties very low, and in the current Sarasota market that usually spark a bidding war.
Strategy for making an offer on a bank owned property varies based on a few criteria:
1) Do we expect or know of multiple offers?
2) How well is the home priced based on true value?
3) How long has it been on the market?
Our goal is not to undercut the list price, but to get a great deal.
For instance: Let’s say a home that is worth $200K is priced at $100K by the bank. This is a great deal at list price. Most investors or buyers are of the mentality of “getting more off list” and generally offer less than list. Those a bit more savvy may offer list price. But to my mind, the smart investor offers $110K – still well under market value, still a fantastic deal, and it outbids everyone else. The trick is in changing our mentality from “beating the bank” to “getting a great deal considering today’s market”
If the property has no other offers on the table, undercutting list price is generally appropriate. If there are other offers on the table, we cannot know what they are, so our offer should represent the highest and best price we are willing to pay.