For those of us who are dealing mainly in the REO arena and first time home buyers or investors, getting an offer accepted on a bank owned property has become increasingly difficult. It has been my experience that even cash offers are now more than full-price, and the only way for finance deals to be accepted is to offer 15-20% above asking price. If the house has any kind of code violation, cash is the best way. I have also noticed that inventories have dropped significantly.
REO realtors have also adopted a strategy whereby they list the property at such a low price, that it creates and environment where multiple buyers get into a "bidding frenzy". The result is that the REO agent receives multiple offers, and most of them are higher than asking.
This does not mean that your deals will not get accepted. It just may take a little longer, a few more showings, and a couple more offers. It also helps to talk to the REO realtors to get some idea (yeah - I know they are busy and hard to reach) of where the offers stand. Obviously they cannot tell you exactly, but they can at least guide you.
Now for some good news. According to foreclosures.com in Florida, like California, home sales are up, and so are foreclosures and defaults. For the eighth month in a row, existing home sales rose--18%--in April, with existing condo sales up to--21%, according to Florida Association of Realtors’ numbers. The state, along with California, Arizona, and Nevada, powers the nation’s foreclosure abyss--10.6% of the mortgages in Florida are “somewhere in the process of foreclosure,” according to the Mortgage Bankers’ newest Delinquency Survey.
This means we can expect a lot of new inventory soon, so hopefully the buyer's frenzy and bidding wars will ease a bit. So keep your buyers list handy.
