Originally Posted At http://www.bigbearilluminated.com/

Bank owned properties are all the rage for buyers these days. Every other client I deal with is after the deal of a lifetime and REO's seem like the solution. In many cases they are. The banks are pricing these properties to sell and a good buy is a sure bet. However, being too greedy can throw a wrench in the works. If a bank owned home is already listed at $100,000 under value, than it is a fantastic deal. In most cases, the bank is not going to go much lower.

If you are going to offer $100,000 on a home that last sold for $400,000, the odds are not going to be in your favor. In many cases, the bank won't even bother countering such a low ball offer. It all depends on the condition of the home and how much is owed on it. If the home in question is in good shape and is priced right, it will most likely go for the listing price or within 5% of it. I ran the numbers and in Big Bear, the difference between the listing and selling price is right around 5%.In many cases, the good homes are selling for over the listing price and the buyers are still getting a great deal. If the home in question has been on the market for a year and is a falling down wreck, you may be able to steal it. It all depends on the situation.

If you see a bank owned property and think it is a great deal, you can bet somebody else is thinking the same thing. If you try to submit a ridiculous offer on a property like that, you are not going to get it. You can be sure that somebody else is going to most likely make a full price, or close to it, offer and the home will be gone. I know this from experience. I have lost out on several properties because my clients wouldn't take my advice and make a good offer. They wanted to low ball it and " see what happens ". What happened was, they lost out on a great deal.

What I am trying to get across is this, there are great deals to be had right now, but you have to be realistic. If you see a bank owned property that you really want, you need to be prepared to get serious and make a respectable offer. If it is a home you could care less if you get it or not, then feel free to go low. Just don't be disappointed when you don't get it. There are a ton of buyers out there right now who have the same idea that you do, and the competition is heating up. It is not unusual for a good property to receive several offers. If you don't start out strong, you may not even be in the race.