Buyers Seeking Huge discounts on Listed bank owned properties...Take Notice.
Let me bust your bubble a bit, the price that the bank agreed to put on the property has been heavily discounted already. When we, as listing agents are asked to come up with a price we must justify how we arrived at our conclusion. Here are some of the items we are asked to take into account:
#1... Other current listings in the area that are comparable to the subject.
#2...Other recent sales that are comparable and areas these may be inferior /superior to the subject.
#3... Day on the Market, this will have an effect of how aggressive the bank may want to be in pricing.
#4... Repairs to the property, and an estimate of the cost associated with making those repairs.
#5... Over all supply of competing listings in the area (for general listings, short sales, & bank owned).
There are other subtle mitigating circumstances that can affect the price that the bank and listing broker arrives at to market the property for, but the above are certainly the main ones on our standard opinion of current market value forms.
Lets look at the 5 topics in a little more depth:
Current Listings: What are we comparing the subject too, superior conditions, maintained properties, landscaped, paint, functional utility neighborhood setting, repairs, updates and current days on market.
Recent sales: Same as the above, and original asking price compared to final selling price, gives much insight into what it took to sell a comparable property.
Days on Market: the bank wants your best opinion of what it will take to sell in 30-60-90 and 120 days, this represents a sliding scale. As you may expect much of the activity occurs in the first 30 days of the listing. Further discounts can be expected if the property doesn't sell right away. But a good listing is one that goes shortly after it comes to market, so we want to sell fast and the bank wants to stop the bleeding (loss).
Repairs: This may be subject to interpretation, and could offer some further discounting, we may not see the hidden defects until a home inspection , the first big rain, spring thaw or some-other environmental issue occurs that was not evident at the time of market opinion. But for the most part repairs are taken into account when pricing strategy is discussed.
Supply: Just because the property is banked owned doesn't mean it is a bad property, the prior owner may have built the most extraordinary custom home on the best site in the world, and the bank will want to make it self as whole as possible. If there is an over supply of bank owned inventory in the neighborhood the price will be of course discounted to the point we feel it is competitive...but the bank has the final word.
And that is my final thought...the bank has the final word in the negotiation: When you as a buyer see great value in a property, and make an offer...we will be relying on the preset areas discussed above all the debating in the world will not get the bank to accept an offer that doesn't match the value they have (by committee) come up with. And remember the bank can wait for another buyer and sell to anyone, so don't go in thinking they have to take my offer. Go in Thinking I will have to accept their counter if I want this Property, and I'm willing to walk away if we don't have a meeting of the minds (all protesting after the fact is a waste of energy).
White Mountain Property Expert
25 year Veteran New Hampshire
steve@alpinelakes.com - 800-926-5653 - www.alpinelakes.com
Activerain outside blog: www.yourskiingrealtor.com
Localism Blog: http://localism.com/nh/lincoln
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