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REO Home on Zillow for 168 days.. Is my offer reasonable?

So my wife and I are looking to move and the house we're looking at is an REO home that appears to have been on/off the market for 2 years and most recently listed on Zillow for 168 days. We have a pre-approval letter from our lender and have submitted an offer that is $20k less than listed ($170 vs. $190). Considering the time it's been on the market and the trend that the listing price has dropped roughly $20k every couple of months, I was going to see if this seemed like a reasonable offer? I am VERY new to REO homes and have been trying to do as much research as possible to be well informed IF the offer is accepted. 

Thanks! 
  • March 27 2014 - Oklahoma City
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Answers (2)

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If it is an REO, the bank already bought it back at the auction, so, I don't know where Jim's comment came from.

As for fair market value, and how long a bank will hold on to it?  It really depends on their book balances, and whether they want to keep paying the taxes and minimal yard care and some security.  There is no way to second guess them.  You offer, and then see what the response is.

Obviously, if it has been on and off the market that long, there are occupancy issues and deferred maintenance issues of some kind.  You may not be able to get a mortgage for it.  On the other hand, they may have fixed some of those issues, and that may be why it is back on the market again.  At minimum, you should have your agent show it to you, and discuss market value with your agent, having your agent provide you a CMA for it.  You also should have someone that knows construction issues go with you, to help you figure out how much it will cost you to get it to usable condition.
  • April 16 2014
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The bank has done a BPO (Broker Price Opion) or a appraisal and they will go with that price, some banks would rather it go to auction where they will have representative of the bank bidding against you to make sure they reach the asking price, your bid may not be unreasonable, a lot of it will depend on which bank has the house, some banks are great to work with and others will not even talk to you without a raltor and even then they won't answer. Feel free to contact me if you need more help, I would love to help you.

Jim Williams
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  • April 16 2014
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