After a lender takes back a house, the property goes back on the market as what’s called an REO (real estate owned) property. These are treated like ordinary sales and listed with a broker at market price. The longer they sit on the market (usually due to condition and desirability), the further the bank will reduce it. The bank will only discount past these posted prices about as much as a normal seller.
Further, the banks will not entertain low ball offers, lowball offers are rejected on their face with no counter-offers. The bank’s investors and underwriters have built in percentages that they consider acceptable and they will only counter offer if the offer falls within this area. The banks are trying to maximize their sales of these homes to offset their massive losses. If they are going to sell it for a fraction of the market price, it will only be because the home has sat on the market for so long that the “ratios” tell them to release it at this price.
Fannie Mae and Homepath often have incentives such as no closing costs or home warranties to entice buyers to purchase their properties. Click here to visit their site: www.homepath.com
The good news is that the process is clean; the title is clear and the property is delivered vacant.