Currently, I am working with several Investors that are looking for a property to rehab and rent, or to rehab and sell. Of course, they're looking for a good deal - not a steal, but something with a good return.
When people hear the term "REO" - what does this mean to most Purchasers?
-"Could be a good deal."
-"The bank's just going to let it go."
-and other thoughts along this line
However, my experience has been that REO's in our market are selling not in 30 days, or 60 days, or 6 months.....but A week.
Are banks purposely undervaluing? Maybe. Why would they do this? A lower list price and the term REO attracts Buyers' attention, and thereby multiple offers.
In my opinion, that seems to be what's happening in our area right now. There are 2 properties here locally that were REO that my Investors put offers on, and both sold within a week.
In speaking with the Agents, both properties had multiple offers, and the offers were extremely good. To read between the lines, the bank got over list price.
If the Buyers were Investors, then they must be banking on the market coming back, and coming back strong. If the Buyers are Homeowners, I can somewhat understand. However, in doing market studies on these two properties, both homes needed extensive repairs. Most Homeowners are not interested or have the wherewithal to do this kind of work.
Investors beware - in our market, competition is still fierce.
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