Bank Owned (REO), Financial Hardship, Foreclosures,
We listed an REO property in San Jose recently which had some serious potential and thanks to our Gorilla Marketing with CraigsList we were able to generate a lot of interest. In 2 days we had 3 strong offers came from Realtors and I wrote one for one of my buyers as well. Ironically the offer which captured the Asset Managers attention was not the one that had the highest price even though she countered BOTH of them.
What became apparent to me was that most of us who have been writing offers for years; ASSUME that the person reviewing our offer is ALSO a California Realtor (or in the same State as you are) and knows exactly the significance of each CHECKED-BOX and CONTINGENCY that we are creating on the offers. Compounding the problem was the highest offer had conditions which did not lend themselves to the on-line portal that most of us use to enter these offers. In other words, I had to write a lot of explanations to communicate the nuances of this offer to the Asset Manager.
For instance the realtor with the higest offer was asking for 50% of Section 1 work which is typical in MOST offers we used to write in the OLD-WORD and not the New Realty! This creates un-certainty for the Asset Manager and they don’t want to bother with the offer even though it’s the highest price. Same goes for a precentage carry back on City and County Transfer taxes which when you think about is insane! The Asset Manager reviewing this offer is in Baltimore and the property is in San Jose!! How does he/she is expected to place a dollar value on this condition!?
I suspect that the challenge might be that the buyers are insisting on these conditions (because they bought their house 10 years ago with the same contingencies) and the realtor has no choice but the put them on the offer! However, we need to coach and educate our buyers that this will put their offer in an inferior situation. You are the one leading and owning the conversation with the listing agent not the buyer and you are the one who will be blamed not them!
The solution would be to get a strong estimate on the Section 1 repairs or any other carry back costs and then communicate that as a specific dollar mount which corresponds to what your client is requesting. That way, the Asset Manager knows a head of the time the risk they are taking with your offer.
I hope this help and would love to hear more if you have other examples.
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