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Making Offers Less Than Listed Price |
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Making offers at far less than listed price:
Lenders and their asset managers price their homes according to their market indicators. By
the time the property is listed for sale, most will have obtained 3 BPOs (Broker Price Opinions) and
1 appraisal for a licensed real estate appraiser. 2 BPO orders and 1 appraisal will be completed in
advance of the listing being placed with an agent and 1 by the listing agent before a price is
ultimately determined. What does this mean to you? When making an offer, the owner-lender has
already done their homework (Right or wrong). The price listed will typically be less than the
value determined by 4 separate individuals. Could their price still be wrong? Certainly but,
lenders seldom accept or counter offers that are far less than the price they have already
determined to be less than fair market value especially in the first 30 days of listing. If you are
making many offers and have yet to receive a response from a lender or, one that you deem to
be agreeable, you may have already been banned. Banned? Yes, some asset managers will
notify their agents to no longer submit offer from certain individuals unless they meet certain
criteria. Again, asset managers are overwhelmed with “investors” who have no real intention of
completing a sale.
Although lenders expect some negotiation, their pricing does not seem to have any relationship
with this expectation. Understand that the “bank” has no emotional attachment to the property
and are only interested in disposing of the asset at the highest and best price with the best
terms….for them. A “cry letter” included with your offer explaining why you are making a
“ridiculous” offer will not be seen by anyone other than your agent. Asset Management systems
are very basic and the “lender” will not see your
written offer during the initial process. Offers are transmitted through an online system that asks
for offer price, concession costs (Closing costs or other items requested by the buyer), the name
of the buyer and room for very brief comment, from the listing agent, about the offer.
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Last Updated ( Saturday, 24 July 2010 )
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