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Regular Visitor
Buying123
Posts: 2
Registered: ‎03-23-2013
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REO highest and best

I put in an offer on a house one block where I have been renting for 3 years. We have been watching the market and each year we try to buy with no luck. The neighborhood was built with 700,000 dollar homes and has been crashing down since. Most homes are REOs. Lately, homes are selling in the 500,000 dollar range low. A lot of people are just leaving and letting the bank close. How would you feel if you thought you were buying in a 700,000 neighborhood and really it's a five. You are paying too much. You can probably buy your same house for five

My situation: we saw a house go on the market for 521,000 dollars, REO. Only on the market for 15 days. We put in an offer. Before the bank would take our offer we had to get preapproved/qualified with the bank that owns the property. I gave them all my information. They said they would actually give me a loan and beat the other lender and pay my closing (closing was already in the offer-4%). I put in an offer for 469,000. Hoping to negotiate. The lady from the bank told me that my offer was the highest offer and the other offers were not even near mine. The banks realtor came back the next day and said he received another offer and was asking for highest and best. I told my realtor that I would be willing to negotiate but, I felt like to increase my offer would almost be bidding against myself. I said my offer was highest and best. Anyway, the bank accepted no offer.

Is this normal? Should I have went up, I was willing to increase to 495,000? My husband says if the house is on the market in 30 days we should resubmit our same offer, should we? My realtor said she has never seen this happen.

We knew the people who lived in the house and they said they never had any major issues, they were just tired of paying that expensive mortgage. The hose needs all new carpet, appliances, and wall repairs and paint (5000sqft). My realtor thought about 15,000 dollars.

Any advise?
Regular Contributor
Bay_Man
Posts: 58
Registered: ‎01-20-2013

Re: REO highest and best

"Asking for highest and best" is bank's negotiation skill and is called ocunter offer to you. Bank always plays such game to bid against yourself as they do not care whether it sells or not. They can withstand the pressure. If you are really interested, as you are ready to accept 495k, just add few thousand dollars like 1k or 2k or 5k to send a counter offer. Do not directly jump to $495000.  Expect multiple counter offers in future. At one time, I faced three times such counter offers. First two times, I increased $5000 each, then fed up and increased $2000. They stopped further negotiation at that point! I suggest you to review you comparables (homework) and carefully provide counter offer.