The Paso Robles area has its fair share of REO's and short sales these days, but I am sure we are not as inundated as many other California locales since buyers are scooping up these great buys.

I just want to bring to the attention of buyers who might be interested in purchasing an REO in our San Luis Obispo North County that, at this time, the banks are pricing these REO's at very competitive listing prices.  Rest assured that most are listed some percentage below current value, but the banks aren't as desperate as you might believe. 

The bank does their own homework with the help of a Realtor(R) looking at comps, etc., before listing the home on the market.  They are in no rush to sell a home $100,000 below its current value unless the home has sat on the market with no offers for several months, and in that case, then I would believe that the bank is chasing the market down (as evidenced by several price reductions), or they received unreliable comp information from the listing agent they hired.  In most cases, I would be quick to say the market has just declined a little since it was listed as most agents hired by banks/lenders know their craft well enough to price a home properly.

The point that I am getting to is, as a buyer, don't expect to be able to offer $100,000 less on a REO home listed for $600,000 and expect that your offer is going to be accepted.  In most cases, there will be more than one offer, and the bank will ask all for their best price and terms and then accept one.  It isn't a fire sale, at least in Paso Robles, at this time. 

There are great deals to be had, and the banks/lenders do want to get these distressed properties sold, but in most cases, they are unwilling to accept an offer that is 20% below their already very reasonable list price. In fact, the last 3 I have sold closed escrow at $1,000 to $2,000 above the listing price.  Be prepared for that if you really want the home and the bank has other offers.

Don't get me wrong...  I will always write a contract for my clients at whatever price they choose to offer, but at the same time, they must be aware of what the probable outcome will be and be ready for the disappointment when another offer is accepted.

My recommendation is, for whatever it is worth, if you love the home and you think it is a great deal, then it probably is.  At least present the bank with an offer that is within a reasonable ballpark of being accepted instead of wasting their time and putting yourself through the disappointment of losing the home to another buyer.

Realtors who may have viewed this blog, what is happening in your area with regard to sales prices of REO's?  I would love to hear if your experience has been different than mine in the last couple of months...

If you have any real estate questions or general questions about Paso Robles or San Luis Obispo North County, please contact me via email, call me at (805) 235-0234 or visit my website for more information.

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