How do banks price their REO properties?

When a bank takes over a property, they conduct their own due diligence to get an accurate depiction of the homes worth. They put forth a team of people to assess the current market value of the property through Real Estate Broker Price Opinions (BPO) and in some cases full property appraisals. Based on these findings, they typically price the home within 10% of the current market value. Of course, there are always rare exceptions. Banks are in business to make money. If they cannot make money, they need to minimize their losses. Banks are looking for a certain "net amount" on each particular property. This "net amount" is based on their research of the current market value minus costs associated with the property. They have priced the home sell quickly but as close to market price as possible. Many buyers make the mistake of thinking the bank is desperate to get rid of the property. They believe they can submit a low-ball offer and expect to get an acceptance or at least a counter- ...  more