Let's cut to the chase.
Banks are not just motivated by price. I have researched this and lived it. I suggest agents look at the structure of REO deals and see what terms work best.
Some experienced agents have told me that buying REO property or short sales isn't much different than "traditional" real estate. Bull.
If you look at all the sales of single family homes in the MLS on beachside south of the Dunlawton Bridge you will find something interesting. This area includes Ponce Inlet, Wilbur by the Sea, and some of Port Orange. Only 2 homes have sold for under $100,000 in the past 6 years. Both needed repairs. Both were REO. Both were sold this year by the same Realtor.
The most recent sale attracted 23 cash offers. According to the listing agent (disclosed after the sale) 5 offers were higher than the winning bid. Several were over $100K, and one offer was $110K. The sale price was $96,650. 12% below market value. (What is market value? How much somebody with money is willing to pay - in this case 110K)
Terms got the deal. Knowing what the bank looks for can save a buyer thousands. I have seen banks pick an offer 15 grand less than another offer over a very minor issue. And, this was on a house in the 120K range.
I suggest if you are looking to buy a bank owned property or a short sale - work with somebody has listed AND sold plenty of them. Many agents out there just don't get it.
Short sales and REO can be 20 times the work of a regular listing and most people aren't willing to work that hard. One of my brokers held a course on short sales and was amazed that most Realtors in attendance said it was way too much work for them and they absolutely would not do it. Think a short sale is hard? Try an REO!
An experienced REO agent knows what will work and what won't. They also have a better idea of values in a given market because they are constantly required to do research. We are in a dynamic market and you need somebody who knows where they are going and how to get there.
Don't get me wrong. There are some awesome buyer's agents out there that have never listed an REO or a short sale and can get it done.
There are also agents out there that refuse to listen when the listing agents practically puts the deal in their lap. Their buyer's offer will not get accepted and they move on. A few days later a better (not higher) offer comes in. The day after the sale price is published in MLS, they see that it sold for $10K less than what their buyer offered, and then call me and accuse me of not submitting their offer. If an REO agent tries to help you structure your deal, you need to listen.
Thanks for your time,
Experienced REO Agent
Concord Real Estate Inc.