Attack of the Home Buyer Seminars

Within the last few weeks buyers have been coming out of the woodwork and business is starting to boom again. Most of the buyers that I have met recently have the desire to purchase Bank Repo homes or Short Sales. Yes it’s a buyers market and banks have an unusually high inventory, but what I’m seeing is ridiculously low offers from buyers. With the current state of the market and an increase in activity I thought it was important to address Low Ball Offers and how they are looked upon by the bank.

Let me start by explaining that here in California, the bank that currently owns the property is not always the bank that wrote the original loan. Meaning, the current bank has zero vested interests in the property except for their current purchase. This being said, most banks or property management companies that purchase homes at auction will purchase the home for pennies on the dollar, then re-list the property just below market value. Simple math will tell you that the current owner or bank can sit and hold on to the property for a long time rather than dump the property.

Now it appears that the current Home Buying Seminars are packed with hopeful buyers. The problem, in my humble opinion, is the only ones making any money are the speakers and the seminar companies. The speakers at the seminars are telling their audience that banks are desperate and willing to sell homes way below market value. Day in and day out I’m being asked to write low ball offers. I’m trying not to laugh folks, because the banks don’t have to take low ball offers or any offer for that fact. Remember, they purchased the home for pennies on the dollar, so they can sit on the property for months and even years before they loose anything.

Now writing a silly offer (for example: Listed Price $300,000 Offered Price $180,000) try to think of the property from the banks eyes. If you’re the bank and you purchased a property for $200,000 and the current value is roughly $320,000 and you list the property for $300,000, then why would you take $180,000? What do you have to gain by dumping the property at a sales price of $180,000? What do you think it’s costing the bank to maintain a vacant property each month? If you owned a home that you paid $200,000 and you know the value is $320,000 would you sell it for $180,000? I doubt it!

Here is a document that a bank recently sent me after writing a low ball offer for a client. It was requested that my client sign and return this document before the bank would even look at the offer:

WRITING YOUR OFFER

Low Offers – Unrealistic low offers will NOT be considered! Treat this like any normal seller. Expect to pay at or close to market value or do not make an offer!
Foreclosure Price / Previous Loans – There are unrelated to the price Seller will accept
History – Seller and agent have no knowledge of past owner or history of property.
Contingent Offers – No offers contingent on a sale or closing
Assignee – No contracts with “and/or assignee”
Service – Seller will select title and escrow

This continues for 24 points and the contract will NOT be submitted to the bank till the buyer signs the document.

All of this being said, is it worth your time to continue to write ridiculous offers?