I wanted to share three experiences with REO's that I have had recently. First let me say that the number of REO's available for sale in Orlando is less than half what it was back in January. They come on the market every day, but they are selling as quickly, more so, than they are being listed. Here are three examples.
The leaky roof: This home had been on the market and under contract for some time when the prior deal fell apart due to financing. It was put back on the market on a Thursday evening. I showed it to my customer Friday afternoon, and there was another agent there when we were leaving. My customer told me to have a contract prepared, but to hold off on the price. He felt confident that he wanted to make an offer. He just did not know how much over the asking price he wanted to pay. After seeing the home, he decided to go $10,000 over the asking price with an escalation clause going up to $15,000 over the asking price. Before we looked at the home, I called the listing agent who told me she already had offers on the home. We rushed to get our submitted, but she had already submitted the others and the bank had countered one by the time our offer was in. When the bank saw ours they withdrew their counter offer to the first party and countered ours on Monday. Wednesday we were under contract, and the inspection was Friday. The home inspection turned up an active roof leak that was not visible in the home as well as several other places where leaks were imminent. There was also a leak in the home and a distinct possibility of mold. We cancelled the deal.
The unbelievable deal: A home came on the market that was not really what another customer was really looking for, but close enough. They had their minds set on a townhome for the convenience and maintenance free lifestyle. This was just too good to be true, so they decided to make an offer on a single family home in fantastic condition. There was a line of people to see the house the day it went on the market. When I ran the comps, there were two distress sales of $250,000 and $270,000 of inferior properties. There were also several more "normal" non-distress sales all over $300,000. Their preferred price range was really only up to $250,000, but for this house they offered $275,900; $35,000 more than the asking price. When I submitted it to the REO agent, he said that it was not even in the ball park.
Stiking out: I showed homes to another customer, and all the homes we saw were REO's. In some areas and price ranges, REO's and short sales just seem to be what you find. They loved one house, but when I called the agent they had just accepted another offer. They loved another one, and that agent said their was still time to get an offer in. They already had two, but neither had been accepted yet. We submitted an offer $20,000 over the asking price with a concession for buyer's closing costs. Almost a week later we finally were notified they have accepted another offer. Our offer put us pretty much in the middle of three other comparable sales of bank owned properties that recently sold, but the competition bid it up I guess.
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