The largest misconception about bank owned properties is that they will take a low ball offer, thus making them a bargain. While that was somewhat true during the era of 2007 – 2012 when the banks dumped hundreds of thousands of homes through the U.S. at auctions, things have changed.
Today, these properties are managed by smart and disciplined asset managers who work within strict guidelines. They are well aware the prices are going up and they are in no hurry to sell off their assets at today’s market value, as it’s worth more every day. We are seeing more and more of these properties lingering on the market for months with the banks patiently waiting to get their asking price.
Don’t expect the bank to be grateful for your low ball offer. I have had many buyers who learned the hard way by missing out on a house they really wanted while someone else was happy to pay the bank’s list price. Once you do submit an offer, the bank will counter offer or reject an offer without a counter offer, if the offer is not within a reasonable range of the market price. This is normal operating procedure for a bank. There are no emotions or timelines for banks; they are, after all, an institution.
Banks play by their own rules (what a surprise!) and do not provide home inspections or seller’s disclosures and most often sell homes in “AS IS” condition. They are also not motivated by the typical life changes that conventional home sellers are.
That is not to say there are not any “value purchases” to be made in properties that happen to be owned by a bank, but the idea that all bank owned properties are bargains is just plain wrong.