Thinking about Making a Low-Ball Offer on a Foreclosure Property?

Thinking about making a low-ball offer on a foreclosure? Think again. Most foreclosures currently on the market are priced so low, that they are getting multiple offers and selling at ABOVE their asking price, according to the the San Diego Business Journal.

Bank-owned homes recycling back into the market after foreclosure are being priced well below market value in order to solicit multiple bids, which in some cases exceed their original asking price, agents and analysts say.

Brian Yui, chief executive officer of HouseRebate.com, which tracks listings of bank-owned properties — known as real estate owned, or REO, properties — says banks are underpricing properties and selling them much quicker than traditional home sales.

“The banks appear to be getting fair market value for their homes,” he said. “For buyers thinking to lowball REO listings, they must think again as there are other buyers out there willing to pay (fair market value).”

Foreclosures are skyrocketing as borrowers default on mortgages in record numbers — in many cases walking away from homes because their mortgages cost more than the homes are now worth.

Of all the home sales in San Diego County in May, 36 percent were bank-owned properties — homes that had been foreclosed by lenders in the prior 12 months and then resold, according to DataQuick Information Systems of San Diego.

Many of them sold above asking price, says Yui, adding that he noticed the trend while looking up comparable prices in Escondido of a bank-owned house he was considering buying for himself.
In that one search, he found 10 properties — seven of them REOs — that closed above their listing price.

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