Foreclosure surges will always catch the attention of home buyers and real estate investors. However, don’t let the list price set unrealistic expectations of how much you might pay to purchase the home. I was recently contacted by a client who wished to view a foreclosed property listed for $109,000. She liked the home and the lot, and we decided to offer full price. After all, the home had only been on the market a few days, and it fit all of her needs and it was the perfect location. Besides, there had already been numerous showings that day and the tax value was $143,000. The buyer did not want to risk losing the property by offering a low price when the value was evident. Our offer was rejected, and several days later, we noticed that the bank reduced the price to $94,000. We submitted yet another offer for $109,000, only to have it rejected, followed by another price reduction to $89,000. I informed by buyer that the bank was using price reductions to create an auction-type atmosphere, with the full knowledge that the bank was looking for a much higher offer than $109,000, even if it was now listed for $89,000. The property eventually closed for $131,000. These teaser prices are designed to get the attention of buyers, yet it does not offer any insight into what price the bank expects to receive after all the offers are evaluated. When was the last time you offered more than list price to buy something and were subsequently ignored?
5 Dec
