John F. Kennedy once said, "You can't know where you're going until you know where you've been".
The funny thing about bank property is you need to know where you are buying it and that most markets are not Stockton California.
Bank owned property in the Fort Worth metropolitan area is the fastest mover today in all homes for sale. There is a large misconception that a perspective buyer may offer a bank significantly less than the listing price and the bank will be grateful for the offer. While we all wish this to be true let's talk about how banks are pricing properties today. The North Texas Real Estate association came out with the latest statistics concerning sale amounts and list price. The statistics tell us that homes on the market today are selling for around 98% of their final list price.
Banks, just like any other seller of an asset will start at a beginning price. Should the home not receive the appropriate activity the bank more often than not will go through an automated price reduction every 30 days or so until the property shows activity and eventually sells. Buyers who submit offers on these properties at significantly lower than list offers will face one of 2 scenarios.
1. The Bank will reject your offer outright.
2. The Bank will hold your offer and take a great deal of time responding. They may soft counter however the selling strategy is to receive multiple offers and put the buyer into a highest and best situation.
The leverage in this situation shifts to the bank as you have no idea where the other offer or offers are. Many times after the highest and best is submitted the bank takes none of the offers and continues to move along at a pricing strategy as mentioned above.
What does all this mean to a buyer? The best bank properties to consider are the one that have already seen price reductions and are a solid buy at their present list. The buyer should then come in with a realistic offer and you might have just purchased a home at an outstanding value.
The lesson learned from this is that the bank does not might giving you a solid equity position however they have plenty of time to maximize their property selling prices as well. Shop smart with a qualified Realtor and you will find your bargain home. Just do it the right way.
Over 12 years of experience in the Real Estate and Mortgage industry with an MBA from Georgia State University. I have 2 teen age children and enjoy a good game of golf.
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