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« Placer County Real Estate Sales October 20th - October 26th, 2008 | Main | What Price Should You Offer - Playing Games vs. Getting The Home »

November 03, 2008

Getting Your Offer Accepted on a Bank Owned Home

Getting an offer accepted on a bank owned home in Placer County or the Sacramento Region in general can be very tough in the current market.

As of our most recent quarterly update on the Placer County REO market in early October, there were 295 bank owned homes for sale, 304 pending sale and 571 sold in the preceding 3 month period. That means that there were more bank owned homes in contract than there were listed for sale and that based on the prior 3 months sales there was only 1.39 months of REO inventory available.

These numbers illustrate that there is larger demand for bank owned homes than there is supply.

Typically, when there is more demand for a commodity than there is supply for that commodity the price for that commodity will increase.

With bank owned homes this has not been the case.

Banks are motivated less by the maximum price they can receive on each home and are instead motivated by the expedience and ease with which each home can be sold.

They want the homes sold fast and they want them sold with the least amount of effort on their part as possible.

Their desire for expedience and ease has lead them to listing homes at irrationally low asking prices, which creates lots of buyer interest and typically gets the home sold quickly, but also leaves a lot of money on the table.

It has also lead to a shortage of bank owned homes at any particular time and a very competitive bidding environment.

In order to get an offer accepted in this environment, home buyers must be mindful of how competitive the market is and be prepared to write an offer that the banks will accept.

Over the upcoming weeks I plan on writing a series of posts that will go through some strategies you can use to improve your chances of getting an offer accepted on a well priced bank owned home.

The first three posts in the series so far are:

What Price Should You Offer - Playing Games vs. Getting The Home

Time Needed to Close - Remember the Bank's Motivation

Deposit Checks – Bigger is Better (To a Point)

Financing a Bank Ownd Home - VA, FHA or Conventional? (Less Down = Less Likely)

All Cash Offers - Prove That You Have It or It is Assumed That You Don't

The next post of the Series will be coming soon and it will be titled "Closing Cost Credits - You can Ask, But You May Not Like the Answer"


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