Prescott, AZ

I have 2 recent short sales submittedto BofA some 60 days ago and still no negotiator?? I also have a case where they approved a short sale and according to them had the foreclosure on hold while the short sale was worked but they failed to notify the attorney who foreclosed anyway!

I have escalated this file to the President's office and a senior negotiator is working on rescinding this foreclosure and 45 more days have passed!

BofA please tell us how we can help you approve short sales in a timely manner.

Savvy home buyers want to hit the jackpot and buy that Prescott AZ REO foreclosed home, many of which are priced under the market. When banks price REOs under the comparable sales, multiple offers are often the response. This means you could be up against stiff competition for that bank-owned home.

It's not unusual for some Prescott AZ REO homes to receive 5 to 10 offers. Sometimes the bank will throw out all but two offers and then ask the selected buyers to resubmit what is called "Highest and Best" offer. Some banks simply accept the best offer. If you're wondering how you can make your offer shine above all the rest and be the winning offer, here are a few tips to help you select the right price and terms:

1) Get the Property History

Ask your buyer's agent to find out the bank's purchase price on the Trustee's Deed. Generally, it is noted on the document itself, which you can get from the tax rolls or a title company. Compare that price to the price the bank is asking.

Look at the amount of loans that were once secured to the property. Somewhere between the original mortgage balance(s) and the foreclosure sale price is the amount the bank will accept.

2) Determine Comparable Sales

In many cases, the list price has little bearing on the value of the home. The market value carries the most weight. If you are up against competing offers, other buyers will offer more than list price.

Look at the last three months of comparable sales, a mini CMA, for that neighborhood to determine how much this REO is worth. Try to use only those homes that most closely match the REO regarding square footage, number of bedrooms, baths, amenities and condition.

Look at the pending sales.

3) Analyze Listing Agent's REO Solds

Most REO agents work for one or two banks. Many Prescott REO listing agents are exclusive listing agents for REOs, and they do not list any other type of property. Since REO agents deal in volume, they typically apply the same pricing principles to all their REO listings.

Ask your buyer's agent to look up the listing agent in MLS.

Run a search using that listing agent's name to find the last three to six months of that agent's listings.

Pull the history of those listings to determine the list-price to sales-price ratio. If most of those listings are selling for, say, 5% over list price, then you may need to offer 6% over list price, and vice versa.

4) Ask About Number of Offers

If there are no offers on the REO home, you can probably offer less than list price and get your offer accepted. However, if there are more than two offers, you will most likely need to offer above the asking price.

If there are 20 offers, bear in mind that some of those offers might be all cash. Banks like all cash offers. If you are obtaining financing, then you may need to increase the price on your offer to be considered.

5) Submit Preapproval Letter

It goes without saying that you do not want a prequal letter. You want a preapproval letter. Get preapproved from your lender in advance.

Sometimes preapproved by the lender who owns the property is required. Do not expect to use this lender for your loan, but submit the prepproval letter from this lender, along with the letter from your own lender. Banks don't trust others lender preapprovals but trust their own departments.

6) Don't Ask for Repairs

Sometimes banks will pay for repairs, but typically will not agree to do so at the offer stage. If there are problems found during a home inspection, renegotiate after your offer has been accepted.

7) Shorten the Inspection Period

If another buyer asks for a 20 day inspection period, and you ask for 10, you will be deemed the more serious buyer.

8) Offer to Split Fees

Some banks will not pay transfer fees, for example. If the buyer offers to split those fees, the bank will feel more amenable to accepting the offer. Same thing for escrow fees.

Many banks negotiate discount fees for title insurance. If the bank will pay for the owner's policy, the ALTA policy might cost a bit more. But it's still a good idea to let the bank choose title if you want your offer accepted.

9) Accept the perks if availble. Many banks have programs such as HomePath and HomeSteps which allow the bank to pay up to 3.5% of the buyer's closing costs. I have noticed in the Prescott REO market that when these perks are offered, there does not seem to be any downside to using them.

Dave Conners specializes in Prescott REO properties.

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I have noticed over the last couple of weeks that buyers are pulling the trigger. Sure they are offering low but that is the market. I have even seen some people looking for land as of late. I have a tickler file that I put buyers on. They have been getting more and more active. It is a great thing having the tickler file. It gives the buyers more power as they see what is happening in their search critieria of homes or land. They even know about their search items before I do. I guess it goes back to why shop left overs when you can see the first things on market first. So if you are interested in getting the information first just email me and we can get you started..