This is the second post in a blog series on what to expect when you buy bank owned homes in Northern Virginia. In Part 1, we began discussing how much of a discount you can expect to get on this type of property in the current market.
When You Buy Bank Owned Homes, It’s Important to Know Who You’re Dealing With at the Bank
Bank owned property sales are managed by a team at the bank that is typically headed up by the bank’s asset manager. In this improving real estate market, asset managers are simply getting bolder in their expectations with regard to sales price. They know that if their properties are priced well, they can often expect a good amount of competition from Northern Virginia homebuyers and casual investors who are fine with small to medium sized discounts instead of huge discounts to satisfy their margins.
An asset manager will often order two or more independent appraisals on a property, which immediately lays a higher expectation with regard to sales price. They’ll also typically allow a property to be on the market for a certain period of time before acting on any offers that come in. This builds anticipation and competition among people who buy bank owned homes, often stoking bidding wars.
Banks will often order their listing agents to let a home stay on the market for a couple months before dropping the price, and then after a price reduction, they’ll wait a long time before they consider another price reduction.
So what exactly does this mean for your strategy as a buyer? Read Part 3 of my blog series, which will get into the strategy and mindset you need to develop when you buy bank owned homes in Northern Virginia.