Buying REO or bank owned properties in Detroit I read an article on active rain yesterday from an agent that specialized in bank owned properties. His basic attitude was don't submit a low offer and don't put down why you put in a low offer because of the problems with the house. He stated he knew what was wrong with the house.
Unfortunately I think banks are disconnected with how bad some properties are and if that is not included in the offer then they (the bank) have no clue. As the agent said the banks are making a decision strictly on the numbers. It is OK some of the time to make the decision on the numbers. But in Detroit's market the banks are realizing they can't do that. If the bank owned property is in substandard shape then a buyer should be making a low ball offer.
I'm sure I am going to ruffle some feathers here. I know as a real estate agent some agents would rather get and work on an offer that is close to the list price. There is a small percentage of agents that would rather just buy or sell without getting the best possible deal for their client. That small percentage of agents want to just make the sale! Less negotiation, less trouble, quicker money in their pocket. But in the Detroit market the prices are continuing to fall. You are not acting in the best interest of your buyer if you are not putting in a 10 - 15% below list price, if your client is shopping for a deal. It doesn't matter what the comps are now. By summer the price is going to be lower because of the the bank owned properties. The banks have to move the inventory. So they have to lower the price. We do not have enough qualified buyers in Metro Detroit to support the market. But if your client has to have the house, and no other house will do then a low ball offer is not the best tactic. Put in a lower offer that will still clinch the deal and hopefully will be lower than the most recent sold comps.
I have seen sold deals where the bank listed price was $71,000 and sold for the low $40's. Another 2 were listed in the $40's and sold for $5,000. Some banks have sent out emails to the REO's that they were more willing to accept those offers because they had to move the inventory.
The bottom line in Wayne County Real Estate, Livingston County Real Estate, Oakland County Real estate, and Metro Detroit Real Estate is that low offers are being accepted. I agree not all the time and I agree that it would be easier to submit an offer closer to the list price to get the deal done. But as agents we are supposed to be acting in the best interest of our buyers. Sure I can't 100% for sure predict that home prices are going to continue to drop this year in the Metro Detroit market. But I would bet money on it, so if I think that I need to go against common practices and put those low ball offers in.
If you want to Search Michigan Homes for sale or want more information on Metro Detroit real estate go to my website www.russravary.com
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