Today let’s look at the Baton Rouge REO property sales bought with CASH. As I stated yesterday, 2013’s average discount for these properties was 88% using cash. That proved to be a magic number for my investor clients as all of our deals fit right at that number. So was 2014 any different?
The average List to Sold price ratio was 89% in 2014. A slight uptick from 2013, but still a great number to keep handy when thinking about what your investment should be. The average days on the market is also only 76 days, which means these properties are being snatched up a high rate.
After the last three days worth of data, my advice to investors and homebuyers is to work with what the banks are giving us. Since we know that the list prices tend to be at or near market value, we can reasonably expect them to go no lower than 88% of their asking price when paying cash. Buyers using financing should also try this tactic as well – after all, they prefer to sell to owner-occupants.
I hope this series has helped educate those looking to make offers on properties like these. While it does happen, offering 50%-60% below market value is not typically an effective way to win bids in a hot foreclosure market.
David R. Madaffari, Realtor
Keller Williams Realty – First Choice
Cell: 225.772.3283 (DAVE)
37325 Market Place Dr. Ste D
Prairieville, LA 70769
Each office independently owned and operated