As a busy real estate agent in Mission Viejo, I work with a lot of buyers. Like other communities, we have our share of bank-owned homes. Writing offers on this properties is not like any other offer....and buyers really need to understand this.
First of all...bank properties are managed my asset managers who are not working on emotions. This is critical! They are working merely with numbers, appraisals and percentages. I would be shocked if you could find even one who had seen the home in person.
They do not know if the home smells like a Bacon truck ran into a Curry truck.
Secondly....they are not afraid of losing you as a buyer. Unlike an equity sellers, they do not "need" to move. They are not paying a mortgage. They have not bought a new home. They are not moving out-of-state.
They are responsible for getting the best possible NET for the lender.
Yes, they do want to move the home in a timely manner, but not at a discount they can't justify. They do not care if it's going to take all of your extra cash to bring the home up-to-date. They are working only with numbers, and believe me, the appraisal they are looking at has taken this into account.
So how do they think when it comes to pricing?
Typically an asset manager gets the file and orders an appraisal. Then following their guidelines, they price the property aggressively. What does that mean? It means that they are going to price it to move quickly...a bit under perceived value. This is where the real estate agent comes into play. We add to the information provided by an appraiser with market trends. Active listings and market direction are discussed before the price hits the MLS.
After the home has been listed, then the asset manager expects to get an offer close to the list price. They have a % which they will consider....which is private. But I find it's normally doesn't exceed a 3% reduction (not coincidentally this is the amount of normal credits for closing costs). If the home does not sell at the list price, then it's reduced. Again they work with a mathematical calculation based on their own guidelines...and again, they expect to get close to the list price.
The most frustrating thing for Mission Viejo Buyers is to find that a bank-owned home has sold for less than they offered....but offered quite a while ago, when it was a newer listing.
The solution for this? It's to understand it! If we are in a solid position....such as a cash buyer, or one with a large down payment, we will have a bit more room, maybe. But if it's a home we want at a specific price, and that's a firm price, then we need to offer it......maybe more than once. We make sure the listing agent knows we are very interested, but not for more than it's worth to us. Sometimes the agent can come back to us later.
But just remember.....it's not an emotional decision. There is no point trying to "explain" to the asset manager ANYTHING. They will still work the listing according to guidelines. So understanding this gives the buyer the right expectations.
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