Brandon Nelson
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It’s A Freekin’ REO FRENZY!
I wrote last week about the difference between REO and Short Sales. I guess focusing attention on that category of homes had a “law of attraction” effect, because the last 3 offers I’ve written for buyers have been on Bellingham REO properties.
And they’ve all had multiple offers. There are some banks and asset managers out there who are just blowing the bottom out on the prices of some of these properties, and in Bellingham, believe you me: There are buyers ready to pounce like lions on a stack of sirloins!
The first of the three properties had been listed for a month or so, then dropped the price off a cliff to less than $90/sq. ft. This is Bellingham city limits, west of I-5. That is, “core neighborhood” material. For comparison, the average single family home in the same area, in the final quarter of ‘09, sold for $195/foot.
We were one of four offers on that one. We came in strong, but not quite strong enough. It’s pending with another buyer.
The second property was a brand new listing that sneakily hit the market on December 23rd — about the time 95% of agents and their clients are sipping eggnog and thinking about anything but real estate. My clients and I were the first ones in the door and immediately loved the place. We wrote it up and faxed in the offer, only to find out the home had to “season” on the market for 5 days before the bank would accept anything.
Long story short, by Monday after Christmas there were 4 offers. Every buyer/agent team then got in the ring together, blind-folded, mind you, and pulled out the weapons du jour. On that one, we came out on top, and will get in there first thing next week for the home inspection.
The final of three properties in the REO Frenzy of 2009 came on the market at roughly 15% of assessed value. No, that’s not a typo. It assessed for well over $1M and hit the market under $200K!
I can’t share much info on that one just yet, because we’re still battling it out with 7 other known offers, and perhaps many more by now; (7 was yesterday’s count). I predicted 10 at least, but that number is likely low.
In situations like that, you can bet the winning offer will be all cash, no contingencies, 1-week close, with some sacrificial virgin thrown on top for good measure. Oh, and I wouldn’t be surprised to see it go for close to 200% of list.
If you find yourself salivating to get in on something like what I’m describing, get your ducks in a row by getting pre-approved first thing next week, read up on the Ninja Strategies for strengthening your offer, and psych yourself up for some flat-out real estate cage-fighting. Personally, I love it. I love the juice of competitive anything. Bring your A-game and let’s get it on!
so on the “secret” one, how are the property taxes of ~11k being figured into the buyers strategy. Will the city automatically lower the assessed value to the new sales price??? Just curious….
Hey Glenn,
Despite the duplex and 36′x36′ shop on the property that can combine to generate $2K/month, the value is in the dirt. It’s zoned for upwards of 60 units and is driver/sandwedge from WWU. The taxes could possibly be renegotiated with the Assessor and a strong enough case is there to be made to have them lowered, in my opinion, but whether or not they stay high, the equity is astronomical and worth it.
Of course… this is just my opinion.
Hey, missed you at the Padden Plunge on New Year’s!!!
Brandon
I actually plunged early, ~ 10 am that morning.
…. thanks for the reply on the property …
REO is the real thing these days, no doubt. That’s why there’s sudden increase in its rate and yes, Bulk REO Investing. Great post Brandon!