REO - Asking Price! What?

[TFXK]

Newbie confused about REO.

There is a property down the street from me that has been on the market for about 4 months now. It is Bank Owned.

I first saw it listed with ReMax with an asking price of $71,900.
I chuckled and went on my way (way too much for this property IMHO)
(I didn't realize it was REO at the time)

It has since been reduced in price to a mere $69,900 (be still my heart - LOL)
Been that way now for two months.

I have since seen the property listed on Realtytrac.com (foreclosure website)and it shows an "estimated" price of $30,000 (what they believe the Bank is still owed on the property).

My Questions -

Is a Bank Owned property such as this, open to counter offers much lower that what is currently being asked? Was $71.9K (and is $69.9K) just overly optimistic ... wishful thinking by someone in the Bank?

I'd be willing to make an offer on the property, but nowhere near what they are presently asking for it. So I guess I want to know if I'm just wasting my time offering something like say $40k - $42k ... Will they just laugh at me, or would such an offer be seriously considered. With the Rehab expense, I just can't see paying much more for it.

The house went into foreclosure back in November. I (personally) think it will sit there for a very long time if they continue to ask $69.9K for it.

I have seen several (limited experience that I have) Bank Owned Properties being listed by Agencies for prices that are simply outrageous for the condition of the property being offered.

So just how flexible are these Banks when it comes to REO properties?

Do they realize the condition of these properties, or do they just assume they're worth what similar properties in the area are worth?

Appreciate any enlightenment you might give concerning REO.

[Dan Auito]

Banks have had it pretty good lately in many areas as a result of the hot markets so in many cases they are able to sell their own properties for fair prices through real estate agents and so forth.

If I where you I would write my $42,000 dollar offer with all my approvals and pre-qualified documents to prove you have the ability to close the deal quickly.

Also include why you are offering this price IE...

no sales commission involved
document all the repairs needed
Tell them you can close fast, no more holding or mgmt time for the bank
etc... you will buy it AS IS!

Present your short sale package above to the lending officer in charge of the sale and check back periodically to see if they are considering it!

Again Randy Lee at www.purpose.4t.com has the detailed outline on how to do it from start to finish and get the results your after!

[brianb_cobbres]

Okay Dan, you just confused me twice in the same post.

1. I was under the impression a short sale was more a pre-foreclosure deal where you offer to buy the house directly from the bank prior to the actual foreclosure using the banks potential expense and any rehab costs to get a workable purchase price. With the present owners permission of course.

2. Randy Lee's books seems targeted at pre-foreclosures not buying REO from the bank for rehab although a new book is coming.

So am I way off base about a short sale, or is it more of a generic term that applies to both pre and post foreclosure. And does Randy Lee's book on pre-foreclosures cover post foreclosure and REO?

Help a newb out.

Oh and Randy Lee, when is the rehab book going to start shipping? That looks like a must read.