That’s the Way the Cookie Crumbles; End of the OREO

Previously we made a low ball offer on a house in Mesa. We had toured the house and determined that there was significant work necessary to bring it into rentable condition; perhaps 20 to 30 thousand dollars. Also, there was something weird going on with the audio/visual wiring.

The Roca house was bank owned, an OREO property (Other Real Estate Owned). The sellers accepted offers for 10 days, then closed the sale and reviewed the offers. We got a message back asking if we wanted to update (increase?) and resubmit our offer:

“The seller is currently in a multiple offer scenario related to the Buyer/Property Address listed above
and you are receiving this message as a result of a request for the Buyer’s highest and best offer.

Should the Buyer choose to participate in submitting their highest and best offer, the deadline to do
so is 4/10/2019 11:59:00 PM Mountain Time.

A reply to the H&B must be received within the time line for your buyer’s offer to be considered…”

“Highest and Best Offer”, sometimes called BAFO (Best and Final Offer), give the bidder an opportunity to update and re-submit their offer (price, terms and conditions or both). Presumably it implies that you should increase your price.

My previous work involved bidding on government satellite contracts that often ended in a BAFO request. One major difference from the above request is that the procuring agency typically gave you some feedback, some new information, on your proposal versus the competition. There was often an open, question and answer forum where all bidders could submit questions knowing that all competitors would see the question and the answer. The procuring agency had the opportunity to answer or not answer the question. There was lots of interesting strategy on whether and what questions to ask knowing that your competitors would see both.

But in the Roca response, no new information was provided. Since we had no new information, we had no basis to change our offer. We resubmitted the same offer.

We were informed that we were not the winner.

Soon after, the winning bid was disclosed as is the standard process.

We were SHOCKED!!!

Somebody paid over $18,000 over List Price for a house that needed significant repairs.

What are some possible motivations besides, CRAZY!

Also, if you’re interested in roses, see our Sun Flare video.

Next, we look at a house in Laveen and make an offer. This area used to be a very “bad” part of Phoenix but has improved significantly in the last 20 years. A lot of development has gone on the west side of Phoenix with upscale shopping centers and planned neighborhoods. Large companies such as Microsoft are locating there, “Microsoft Mysteriously Expands to 400 Acres in Goodyear, Arizona”. One other advantage Laveen and the west side share is that it is closer to California, about 1-2 hours compared to the East Valley: Mesa/Chandler/Gilbert.

Laveen Village is about 35 miles east of Mesa where the above Roca house is located.

How did we pick these two areas to search in?

We know a guy who knows the entire Phoenix area real estate (residential, commercial, industrial, government, demographic, social trends…) landscape due to his day job and also participates in real estate development. He recommends the East Mesa area, has some reservations about the Laveen area, but did provide the above report on Microsoft.

I’d like to introduce Ryan Barlow.