When is the Best Time to Have a Low (20% or more) Offer Accepted on a REO?

If the bank listed the home at the BPO price, When is the bank most likely to begin accepting that lower price (80% of List) offer?

Deciphering bank motivation... I know I know, it may somewhere between astrology and palm reading, but here goes...

Here in Charlotte, where home values (though more recently declining) have remained relatively strong, it has to be on the market quite some time before they are willing to take that size (20% or so) of a discount. Conversely, in parts of California, I am told they accept substantial discounts within days of listing, why would that be?

What are the variables to consider? And while each bank/REO will be unique, are there any good rules of the road? Or at least a "Rule of Thumb?"?

I think the #1 determinant has to be: What is the likelihood of price declines in the next year?

The higher that likelihood, the sooner a bank would want to say "Let's Make a Deal." Interestingly enough, there are a number of companies that provide this information, the most widely used public (banks have proprietary date too) is from PMI, Private Mortgage Insurance which publishes those "likelihood of Price Declines" for over 350 markets in the US every quarter, and they use it to rate their proprietary private mortgage insurance.

The 120 Day Rule

One thing appears to be consistent here in Charlotte, banks and intermediaries get very nervous once on the market 120 Days. We have seen banks turn down offers of 90% of list in the first few months, only to accept 75-80% of list in month 5. We've seen a bit more flexibility early in the sale process on the less expensive REO's- could that be because even a 15% discount on a house priced at $125K is not a lot of cash comparatively speaking? Or perhaps a recognition that there are a LOT more REO homes priced in this price range and so getting an offer and getting it off the market is paramount?

One thing is for sure, if it lasts 120 days, the Sellers call us and say SELL IT, Bring us an Offer, and they mean it.

I am sure these are two of the external, local market factors Banks consider, but there largest motivation may be their own balance sheet, or their next meeting with regulatory (FDIC) agencies, how close they are to their required reserves, etc, and with these we would not have any idea of their motivation.... except watching now as the end of the first quarter is fast approaching... will that make a difference?

I would appreciate other agents from around the country to comment, possibly any asset managers, or others with REO experience. watching?

Thanks to all

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