Pricing Reo For What It's Worth
The Most common of all problems is the lost of buyers interest. Buyers realize that most of the activity on a listed home happens within the first few weeks. These buyers in particular have been watching the other homes in the neighborhood, and are likely anxiously awaiting the new listings, so overpricing inherently insults the intelligence of potential buyers who have likely done their homework.
Homes that have been on the market a long time cause potential buyers to think that there may be something wrong with it. Or that the sellers are not motivated to sell. Higher priced homes make the lower-priced homes for sale in the neighborhood look more enticing. Buyers are already concerned with the rising costs of gas and interest rates and are looking to save money wherever they can. The majority of REOs sell within the first three weeks. If a home is not sold within the first month, the price is probably too high. A new MMR (Monthly Market Report) needs to be delivered to the asset manager. Most asset managers work under strict corporate guidelines so the more details agents can get on the MMR the more ammunition the asset manager has to request or grant a price reduction.
When Pricing REO we want to be fair and honest about the price. Pricing too low may cause our investors to wonder about the performance of the broker price opinion (BPO) and whether or not agents are being honest with the value. When the value comes 35% lower then the original loan amount make sure that you're prepare to explain why and have good comps that explain the reason the price dropped. Detailing the BPOs with good photos, recent data and data sources is what asset managers want to see.
Overpricing a house is usually the number one reason why REOs do not sell. The REO should be competitively priced with other homes in similar style, size, bedrooms, and baths; of course, taking in consideration that an REO will likely have repaired cost adjustments. If the repair cost is not significantly high and in your opinion the home will generate a higher sale, please push for repair value. Make sure that you have at least three (3) bids to allow the investor to compare.
Related Tags: reo, bpo services, reo services, javier zelaya, appraisal services, reo agents, foreclosure trends
By: Javier Zelaya
CEO/President
Corporate Asset Management, LLC
http://www.camreo.com
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