Rear Brakes Squealing Like a Pig
So--I bought my M3 with 104k miles on it. It now has 109k. The previous owner definitely neglected the car. When I got it, the brake light was on--it turns out that the PO had gotten a brake job and not had the sensors changed. My guess is that it was a Midas brake job or something.
Anyway, they replaced the wear sensors and said the pads and rotors were fine. At 107k my brakes started squealing fairly loudly. I do not ride my brakes, and did not race the car or anything. I took it into a BMW dealer and they have told me the pads and rotors are glazed and I need to replace them. The rear alone were quoted at $370 (employee price as I work for the company that owns the dealership).
Can I just replace the pads myself? They said there was plenty of life left on them. Should I try sanding the pads and rotors?
No noise first 4000 miles
I have no idea if the rotors were changed. For the first 4000 miles there was no noise--so I cannot imagine that it is a compatibility question.
Go with the anti-sqeal goo
I agree you likely need to re-grease the backs
with regards to the "glazing, but plenty of pad left", before I did anything I'd try re-bedding the pads.
FIRST, since you don't know the history and bedding requires some hard near stops, bleed the brakes, using DOT4 fluid (NOT dot5).
To re-bed, see: http://www.zeckhausen.com/bedding_in_brakes.htm
Step 4, cool-down, is critical. If you stop all the way or get stuck in traffic, especially after the last effort, you'll likely warp the rotors.
If you're not comfortable doing this procedure, DON'T! Find a track guy to do it for you.