The REO Truth.

There is a common misconception that Bank Owned (REO) Properties sell for $100,000 below list price. Have a look at the following statistics taken from the East Bay Regional Multiple Listing Service.

Berkeley and Alameda have been omitted because of the low number of REO sales there. Contact me for stats for those cities.

All figures are for the date ranges 04/01/2008 - 06/30/2008 (three months):

Privately Owned Homes (Under 2,000 sq. ft.*)

City # Sold Average List Price Average Sales Price Average Below List Price
Oakland 338
$563,391
$559,786
 $3,605
San Leandro 90
$424,709
$409,560
 $15,149
Castro Valley 65
$512,669
$496,959
 $15,710
Hayward 64
$392,923
$377,178
 $15,745

REO (Bank Owned) Homes (Under 2,000 sq. ft.)

City # Sold Average List Price Average Sales Price Average Below List Price
Oakland 168
$249,907
$242,688
 $7,219
San Leandro 78
$346,050
$344,697
 $1,353
Castro Valley 13
$443,084
$434,538
 $8,546
Hayward 151
$324,545
$314,543
 $10,002

 

* I used homes under 2,000 sq. ft. to reduce the impact of high-end homes on the statistics. They skew the average sales price for privately owned homes upwards. For example, without these criteria, the average sales price in Oakland was $676,309.

Surprise!

For the most part, REO properties sell closer to list price than privately owned property!

What Gives?

Instead of looking at list vs. sales price, we must compare average sale price:

City Average Sales Price:
REO vs. Private
Oakland -$317,098
San Leandro -$64,863
Castro Valley -$62,421
Hayward -$62,635

The table above shows that the average sales price for bank owned properties is significantly less than the average sales price for privately owned homes in these East Bay cities!!

Here's the Truth!

What makes an REO property a good deal is the low sales price!

To be blunt, if you shop for REO property expecting to buy it for 100K less than list, you are wasting your time. It's not what many people want to hear, but it's true.

Of the 755 REO properties that have sold this year (as of June 30, 2008) in the East Bay*, only 9 have sold for more than $100K below list price! Those are long odds to chase.

Contact me if you want to stop wasting time and finally find that killer deal you've been looking for.

If you are not ready to work with an agent, sign up for my free, no obligation REO email listings, then drop me a line when you are ready for my help.

*Berkeley, Alameda, Oakland, San Leandro, Castro Valley, Hayward