I spend a few minutes each day answering real estate related questions online by email or on websites set up for the public to ask questions and receive responses. I've noticed similar questions tend to come up and sometimes I know I've answered it before, but can't recall where. There have also been times where I put a good deal of effort into preparing an answer and later found the question had been deleted. Well, I thought, why not post my answers to my own blog?
Why are "bank owned" homes being priced so low?
If it is to generate multiple bids and a bidding war, is that ethical? Why not price the home closer to what the owner would really like to get for the home or price it closer to the true appraised price? (Especially since NV law indicates that agents cannot appraise a home; although they can provide a suggested price for sale.)
It is to attract the highest number of buyers and sell the home at the highest possible price in the shortest amount of time. There is nothing wrong with that in itself. There are certainly other problems such as listing agents not being able to keep up with the number of listings they've taken on or the banks not set up to handle the number of properties they're trying to sell. I think our MLS should add a data field for "offers in review" so it's clear if they're sitting on 15 offers but have not accepted anything yet.
If you're looking at bank owned property, think ebay, except you do have the advantage of being able to make bids on more than 1 property at a time. Don't fall in love with the property. Make your highest and best offer and move on to the next, or don't look at bank owned homes or homes that you know are severely under priced.
This market has got to be one of the most confusing and frustrating for buyers. Everything they hear has been telling them it's a buyers market. Then they start looking...make an offer or two and say "WHAT'S GOING ON! my full price offer sat around for 3 weeks and the home was sold to someone else for $40k over list. That's not a buyers market." So all of the sudden someone who might be a first time home buyer in a buyers market finds themselves in situations once reserved only for experienced and thick skinned investors.
Sat Aug 2 2008, 12:50