via Many_Ebb7816
There’s a house two streets from me that’s been sitting as a bank-owned REO since February- listed at $265k, probably worth $210k in current condition, and getting worse every month it sits. I know for a fact they’ve had offers. Reasonable ones. Rejected every single one. Had an auction in April, nobody met the reserve, and now the grass is knee high, there’s visible water damage on the fascia, and a window on the second floor has been cracked since March with no sign of anyone fixing it.
The math doesn’t make sense to me- every month that passes the property loses value faster than whatever they’re trying to protect by holding the line on price, and at some point the carrying costs plus the deterioration have to exceed whatever they’d lose by just taking a reasonable offer. Is this a accounting thing where they can’t write down the loss? An internal bureaucracy problem where nobody has the authority to approve a lower number? I genuinely don’t understand what’s rational about watching an asset decay rather than cutting losses and moving on
Anyone actually been through this from the buying side or know how these decisions get made internally?