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Make It Your Highest and Best Offer
By marionduffy | July 20, 2009
I have had this conversation with several clients recently regarding bank owned listings. When you make an offer, it must be your “highest and best”. While it is understandable that buyers do not want to pay more than they have to for a property, the old days of making a low offer and expecting a seller to counter do not apply in today’s foreclosure market. A good percentage of foreclosures are in the lower price tier and first time buyers and investors are all over them. Most listings receive multiple offers shortly after they hit the market and sell for at least full list price if not over.
There is so much in the news about the terrible housing market, all the foreclosures, and declining prices. So it is very understandable that many buyers think they can come in way lower than the asking price. But the truth of the matter is that usually the asking price is the low price. Some of the comments I get from many buyers are: ”Is the listing agent lying about having all those offers just to apply pressure and make you offer more?” or “What if the lender would have taken less than my offer and I end up paying more than I needed to?”
REALTORS® are required to abide by a Code of Ethics and lying about multiple offers, or anything for that matter, is unacceptable. And, I can tell you from experience, multiple offers on bank owned properties is common place in today’s market. As far as the purchase price the lender will accept, the bank’s goal is to get the highest price with the best terms. That does not mean that the highest offer always gets it. In addition to price the bank considers the terms of the offer as well as the financial soundness of the buyer.
My advise is to offer a price you feel the property is worth to you, but it should be the highest price you feel you are comfortable with for that property. Offering a lower price and expecting the bank to come back with a counter is usually a waste of time. It really wouldn’t make good business sense on the part of the bank to spend time countering one buyer when they already have a better offer from another buyer. Your offer should be contingent on an appraisal, so if the appraisal comes in much lower you can renegotiate.
Topics: Foreclosures, Buyers, Real Estate Prices, Investment Property, Orange County Real Estate, Distressed Properties, Bank Owned |