How To Buy a Foreclosed Property? Go! Gone!!!
April 15th, 2009 categories: Tips For Buyers
- Bank Foreclosure Here!
Auctions:
I have to confess that until last year I never attended an auction. There were not many anyway…Some of the properties that go to Public Auction have been listed in the MLS. In an auction sale there are not contingencies (at least the ones I know about), you have the opportunity to inspect the property in advance and decide before you go how much is the most you will pay for it. You can go with your Real Estate Agent who can help you determine the market price of the property. Auction Companies have in-site lenders who will pre-qualify prospective buyers to make sure they have the ability to close.
The process moves very quickly and you need to be ready to make a quick decision. For more details about my first experience in an auction and how the process went click here.
Court Doorsteps:
That’s for “pro’s” you will be competing in the same field with knowledgeable investors with deep pockets. If you go this route make sure you are educated enough to avoid making a terrible mistake. What you see on TV and all those wonderful success stories might be true if you make it a career, I don’t think it is the way to go unless you are well versed in the subject. You will have to pay cash and inspect the property prior to the auction date.
Our beloved friend the Multiple Listing Service (MLS):
Just be ready to “Jump” and put your best offer in terms of price, financing and time to close… As the number of sales increase and as the banks price the properties at very attractive prices the “best deals” receive multiple offers and most of the time you are competing against cash buyers. In the last couple of months we have also seen a decrease in the number of foreclosed properties-new listings. In a way it has become a “private” auction!
If a foreclosure is what you are looking for, ask your agent to keep you updated on every new listing that hits the market. Banks normally do not accept any offer in the first few days but you will be more motivated to put an offer if you know there are not 14 offers ahead of yours. You can expect a response 2 or 3 days after the offer(s) are presented to the bank. They come back with a counter offer, very one sided in my opinion…since most of the terms favors the bank. That’s the price you have to pay to get a deal! It’s very hard to have them do any repairs…what you see is what you get!!! Some are requesting no contingencies on inspections. Many of the foreclosed properties, even some in very good shape, do not have appliances. You can not trust the pictures … sometimes you see the kitchen with the appliances and discover when you visit the property that it doesn’t have any. I have seem many counteroffers from banks that include a clause excluding the appliances (in case they disappear between the time the contract is signed and the closing day)
Very good article.