This is my response to a buyer that would like to offer $400,00 on a $650,000 REO (bank owned)
Just a heads up. The bank will not counter offer. It is Bank Owned, and you are coming in $250,000 (@$400,000) under list price, if you can offer $450,000, it is more attractive to the bank. Are you going for a conventional loan? Jumbo is over $417,000 financed. 80% loan with 20% down 30 year? Less than 20% down you will need MI (mortgage insurance) about $150.00 a month. Rates are low right now 4 1/2% fixed 1-2 point buy down.
The offer will also need "Proof Of Funds" a current account statement with the funds in the name of the person making the offer. And Ernest Money Deposit 1% minimum. As you probably already know the turn key upgraded homes with bigger lots are high in demand, whether Bank Owned or Short Sales there are multiple offers, highest and best is the winning bid. The average price for first time buyers is between $250-350,000. With the bank accepting more short sales there will soon be less Bank Owns.
We are seeing the RE market bottom out and prices are starting to level off here in Riverside County. Currently most homes are at the 2001 and 2002 prices or 50% less than the peak years "04-"07. Good deals are out there but the turn key homes you will need to offer on average $5,000-8,000 higher then list price to win it. Otherwise you will be caught in the "No Home Zone Blues" and making offer after offer and not getting the home you want because of a few thousand dollars. I know what they are preaching in the media but I can tell you first hand what is happening here today in this RE market.
Was $1,000,000 in 2004 now only $475,000
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