Topic Title: Frustrated and Confused in So CA

First Post:

Weve all been hearing reports on this BAD BAD economy which is approaching depression level status. Home values in So. California have fallen drastically and are predicted to continue at least until later this year. However, what weve been witnessing as homebuyers is completely the OPPOSITE! Weve been bidding $10,000 over asking price on bank owned properties and losing out. Ive bought and sold properties at the height of the housing boom and never witnessed this before.
This past Monday a bank owned property went on the market for $374,900 at noon and by 2pm I had my agent fax over an offer for $377,500. (I would have offered more but this was a brand new listing with no other offers-yet...the other listing had 4 offers). Still havent heard back from the bank. I visited the property (without my real estate agent) and another agent let me in. Without him knowing I made an offer, he said the property would likely sell for around $425,000. Now mind you...this is NOT a short sale..its a bank owned property in need of repairs. On top of that he said even if you did offer $425000 for the house with an FHA loan, the bank probably wouldnt consider it.
First of all, if a property is priced at $374,900 and NOT a short sale, how will the buyers know what the last bid is to bid it up to $425k unless the listing agent gives information out on what the highest offer is? Isnt this unethical/illegal for agents to do this? I just have a hard time understanding how a property could sell for $50k over asking price in this economy without there being some guidance as to how much they should offer from listing agents. Should we give up our quest for buying a bank owned property in So. CA seeing that we are using FHA financing?

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