I just answered this Trulia Voices question.
The question is about how a mortgage-funded buyer who got beat by a cash buyer on a Suntrust REO purchase and sale, was wondering if they might be “paranoid.”
Suntrust REO: We bid 25K over the asking price on a property. They asked for our highest and best twice, and we gave it. Last week, we found out we had the highest bid, but the next highest bid was a cash bid for 10K less. We waited another whole week, even telling Suntrust we would take out a mortgage with them. Today, the property was relisted on MLS for $10k less than it was listed for when we bid. Tonight we got a fax saying it was sold. Is something going on, or am I just being paranoid?
Part of my answer included this advice:
“Highest” and “best” are distinct and subjective to every “arms length” real estate transaction.
If you encounter Suntrust again, don’t sweat the technique, whiner.”
The Trulia Voices web reference includes a 90+ page Scribd article that I found that offers one of the most tremendous amounts of information, references and knowhow regarding “Distressed Property Investing” that I have ever read.
Seek first to understand, then to be understood – this article goes a long way towards understanding REO purchasing technique.
And, don’t forget what I told this Trulia Voice:
“Banks pay people to evaluate their collateral and they make informed loss mitigation decisions, everyday.
Cash is winning about 40% or so of all real estate transactions right now, I believe.”
This is what Eric B. and Rakim would advise:
…Classical too intelligent to be radical
Masterful, never irrelevant: mathematical…
It’s cool when you freak to the beat
But don’t sweat the technique…”