Just recently, I wrote an offer on a bank owned property in the Big Bear valley for a client of mine. When I first me these clients, they were already pre-approved and ready to move forward once they found the home that they wanted. Well, it didn't take long for my clients to find the perfect cabin and we sat down to write an offer.  One of the requirements from the bank that was offering the property for sale was that the potential buyer needed to be pre-qualified through the listing bank. My clients were not very happy with the idea of having to go through the pre-qualification process once again, especially as they were pre-approved for far more than they were looking to spend.  Can the bank really require you to pre-qualify with them before they'll look at the offer?  The answer is Yes!

I've been asked by a number of people if the banks can make you pre-qualify through their lender, even when you plan to use your lender of choice. The answer to this question is simply yes.  Not only can the bank ask you to pre-qualify with their lenders, a lot of them won't look at your offer unless you are pre qualified with them.  If you want to buy a bank owned home, you're going to learn very quickly that the bank is in the driver seat.  If you want to buy a bank owned property, be prepared to jump through hoops that you may feel are a little odd. 

Nine weeks ago I wrote an offer for a client of mine on a property in Big Bear that was being listed as a Short Sale.  At the time that I wrote this offer, I stressed to them that they are going to need to be patient.  Short Sales are known for being very time consuming.  I don’t think that agents stress that fact strongly enough because I see a lot of offers made on Short Sales, but they are not completed because the buyer gets tired of waiting and backs out of the deal.  My clients have been very patient and have not complained to me about the time that the Short Sale process is taking.  But I know that it has been frustrating for them.  Every Friday I would check in with the listing agent for an update, I would get the same answer.  That answer was that they are working on it.  When I submitted the offer for my clients, I made sure that there was a time frame on how long the bank had to respond.  I do this to make sure that my clients have an “out” if another property comes on the market that they like.

That is exactly what happened to my clients.  Two days ago another property came on the market that caught my client’s attention. This property was in a much better location and it is bank owned instead of a Short Sale.  As the offer on the Short Sale has been taking so long and there is no end in sight, my clients have asked me to make an offer on their behalf on the bank owned property. 

We now have offers out on the Short Sale and the bank owned property.  We will wait and see who responds first, the short sale or the bank owned.   

I know that the loss mitigation dept. of the banks is very busy right now, but they need to do a better job of processing the Short Sales. Buyers don’t mind waiting, but they don’t want to be left hanging for months.   With the bank owned properties continuing to change, the buyer never knows when the perfect property is going to become available.  The last thing that the buyer is going to want is to be locked in to a never ending contract on a Short Sale that isn’t going to go together.

I was reading through a Real Estate forum yesterday when I came across a consumer asking the question, “How Much Should I offer On a House?”  The majority of the responses were statements like, Offer 80% of asking price, or my all time favorite answer was LOWBALL the seller.  I’m sorry, but in my opinion, this is not giving a potential buyer in any market good advice!  Real Estate is just like the weather, it’s local.  If you want to know what the weather is like in San Francisco, you are not going to listen to the weather reports for Boston.  What is happening in the Real Estate market in Rancho Cucamonga has nothing to do with what the Real Estate market is doing in Big Bear.  Just because you might be able to low ball a seller in San Bernardino doesn’t mean that the same tactic will work in Big Bear.  As I said earlier, just like the weather, every market is different and must be looked at from that point of view.

You may live in a market where the percentage of bank owned, REO properties accounts for 50% of the inventory.   Or, you could live in Big Bear where the number of bank owned, REO properties accounts for less than 10% of the inventory.  If you’re trying to buy in a market where just about every other home is a bank owned property, you may be able to get away with offering far less than the asking price.  But, if you are trying to buy a bank owned property in a market where only 1 in 10 homes are bank owned, and the banks are pricing the homes aggressively, then any offer made at 80% of list price is marked for failure.  It drives me crazy when these Realtor’s make these blanket statements like you should low ball the seller, or hey, it’s a Buyer’s market.  They don’t know what they’re talking about!

Here is an example about why you need to look at each market separately.  As I mentioned earlier, Big Bear has an inventory where less than 10% of the homes listed for sale are bank owned.  Yet, those 10% of homes make up for more than 60% of the sales.  With those kinds of numbers, the bank owned property not only sells quickly, but it sells for asking price or more in many cases.  It’s not uncommon to see multiple offers on bank owned properties and bidding wars develop over the property.

So, when you start looking to buy Real Estate, don’t go into it the deal thinking that what worked the last time you bought a home is going to work now.  Don’t go into it with the idea that I am the buyer and the seller should be lucky to that I’m looking at his property.  Just remember this.  You are not the only buyer!

For more information on the Real Estate market in Big Bear, contact Tony Card and tony@tonycard.com

If you have been following the bank owned properties in Big Bear Lake, CA you are seeing that the number of bank owned homes has declined once again.  This week there are 48 bank owned properties listed in the Big Bear Multiple Listing Service.  The bank owned listings have been holding somewhere between 48 and 54 properties out of about 900 residential listings  If you have any questions about the bank owned listings in Big Bear, please contact me at tony@tonycard.com

ML #		Price		Address		Area		Bd		Baths		SF Apx Ttl
	290691		58,300		403 HIGHLAND LANE		SUGARLOAF		0		1		463
	290522		76,900		603 PINE LANE		SUGARLOAF		2		1		976
	290487		79,900		426 LEONARD		SUGARLOAF		2		1		708
	290289		85,000		487 IMPERIAL AVENUE		SUGARLOAF		2		1		600
	282644		86,900		879 PINE LANE		ERWIN LAKE		2		1		784
	290719		88,350		2080 4TH LANE		ERWIN LAKE		1		1.5		780
	290911		89,000		2127 7TH LN		ERWIN LAKE		2		1.5		1080
	290738		90,900		2126 FOURTH LANE		ERWIN LAKE		3		2		1056
	290294		94,900		614 MERCED LANE		BIG BEAR LAKE		1		1		588
	282650		99,798		1024 GREENWAY		BIG BEAR CITY		2		1		960
	290178		107,900		45395 7TH STREET		BALDWIN LAKE		3		2		1586
	290462		114,900		140 HIGHLAND		SUGARLOAF		2		1		864
	273377		129,900		1837 BALDWIN LAKE RD		BALDWIN LAKE		2		2		1050
	290208		129,900		45941 PARKWAY		BALDWIN LAKE		3		2		1448
	290629		135,000		904 PETER AVENUE		BIG BEAR CITY		2		1		912
	290604		139,000		324 HIGHLAND		SUGARLOAF		4		2.75		1600
	281847		139,900		2176 1ST LANE		ERWIN LAKE		3		2		1000
	290517		157,200		827 KERN		SUGARLOAF		3		1.75		1454
	282363		164,900		46807 SKYVIEW DRIVE		LAKE WILLIAMS		3		2		2198
	281846		169,900		813 CYPRESS LANE		ERWIN LAKE		3		2		1202
	281910		179,900		805 CYPRESS		ERWIN LAKE		3		2		1202
	290665		184,500		1895 BALDWIN LAKE		BALDWIN LAKE		4		3		1675
	290840		184,900		1300 MOUNTAIN VIEW BLVD		BIG BEAR CITY		3		1.75		988
	290659		189,900		2184 2ND LANE		ERWIN LAKE		3		2		1160
	290541		197,900		46219 SELENIUM LANE		BALDWIN LAKE		4		2.75		1719
	281071		219,000		39164 MOHAWK		FAWNSKIN		3		2		1854
	290474		230,900		488 DIVISION		BIG BEAR CITY		3		2.5		1686
	290927		232,600		1088 MT DOBLE DR		BIG BEAR CITY		3		2		1456
	290570		234,564		42677 CED