REO’s continue to hit the market with lowball list prices, but the total number of new REO’s continues to trickle instead of flow. List prices continue to be lowball to get people in the door, and once in the door, multiple offers are the norm.
What I’ve experienced first hand, as well as been told by two very reliable sources in the banking industry, is the following…..Banks LOVE cash offers and will take a cash offer at list, or slightly above list (unless there are competing cash offers). If a bidding war starts on a property with numerous FHA offers, as well as 20% down offers, the banks will still take the cash offer, even if it is significantly lower than the others.
For example,,,a good friend and listing agent told me that he had a listing with 17 offers, all conventional loan/FHA. On the final day a cash offer came in at only $1K over list and was accepted. The point is, cash is king, and FHA loans are crap because of the high default rate on them.
