San Diego

[Jean-Luc]

I want an REO property. It went to the bank at auction - it's not listed yet - agent (who has been assigned but doesn't have paperwork yet) thinks it won't be listed for a month.

Property was on market 9 months before auction, listed at 560K.  A 400k bid was rejected, a 510K bid fell apart. A 465 bid was made too late to stop auction.

In surrounding area, many homes are listed at 500K-700K, but the only ones that have sold are listed in the 400K range. Yet the assigned agent expects this property will be listed in the mid $500s.

Property house has termite damage, needs a new roof , it has a 4 acre avocado grove that needs serious work.

I'd like to offer $465K cash, with no contingencies.  What's my best bet:

- Submit a 465K-as is-all cash bid NOW to the assigned agent, and hope he tells the asset manager it's a great deal?

- Wait until the property gets listed, and then submit the 465K-as is-all cash bid?

- Wait until the property gets listed, match the price but add inspection contingencies that will "discover the roof, termite damage etc.?

I do want the property. But I also have a budget. Many thanks in advance for any advice.

[kitkatpaddywhak]

My point of view on it is it doesn't hurt to make the offer to the agent now if you really want the property.  If nothing comes of it, then you can always put the offer on it again once it's officially listed.  If the property is listed in the mid-500k, you might have to wait a bit before the bank accepts your offer, though.  It all depends on how desperate they are to get rid of the property.

[elbarco]

One note.  A couple times I was looking at recent REO properties in the same situtation where an agent was representing that they had the listing and that is would be on the market in a couple weeks and they were just waiting for the paperwork to get it on the market.  In both instances, that agent did not get the listing and the house didn't come on the market for months.  In both instances the houses were in real bad shape, one a serious soils issue.  In both instnaces, the houses were listed over market and sat for awhile.  One still sits.  The other the listing expired and was relisted for 30% less and ultimately sold.  All that being said, if you want to try a preemptive offer, go for it, just temper your expectations that you will have realistic or organized sellers on the other end.  Don't get too fixated on this one property and potentially miss others that might come and go; i lost my focus chasing one of these and missed one that would have been a better deal when all was said and done.  Also, I would say write the offer as-is, since that is what the bank will want to see, but still have inspection contingencies because you never know what you will find.  Later if you want to try to negotiate concessions, you could still try.

[Nanomug]

How did you find out who would be the listing agent?  I'm curious why you didn't go to the foreclosure auction and purchase the home.

The asset manager for the REO is in a different department from the short sale department.  Rarely do they ever communicate and mostly they are in seperate cities.

Without any contingencies there will be zero ability to re-negotiate the purchase price as there is no leverage on your side.  The asset manager and listing agent know that the buyer has money at stake and is unable to back out without losing money.  They'll say buy or don't buy.  If you don't buy they will keep your deposit.