40% OFF? - Yes Please!
The majority of today's Home Buyers are well aware of the discounts available in the foreclosure market (bank owned homes for sale). Experience shows the best deals are bank owned homes (REOs). And in the current market many banks are looking to get the "inventory" off their books. In most cases, foreclosures and bank owned property represent the very best deals in the market with discounts of 20, 30, even 40 and 50% off the previous sales price. Here's the caveat: if you're a buyer wanting to take advantage of these once in a lifetime prices ... it's important to understand how to navigate the chaotic and fast paced market. Because if you don' move fast and with confidence, someone else will.
Here are a few basics to get you started:
The ASKING PRICE takes into consideration the condition of the home. Don't expect to negotiate deep discounts because the place is in rough shape. In most cases, foreclosures are sold "as is" and priced accordingly. It's true that you'll have an opportunity to have the property inspected before you are fully committed. But know your limitations and don't consider bank owned foreclosures that need more work than you are willing to take on. The bank will not make those repairs for you.
Don't gamble with your offer. Put your best offer on the table and do it quickly before someone else does. I can't tell you how many foreclosure buyers are shocked to hear that the bank has 10 other offers on the home. This is common and the best deals truly do fly off the shelves. This means putting your absolute best offer on the the table the first time (*hint* this may mean more than asking price). It doesn't matter if your offer was there first, second or last- the bank will accept the best over-all offer. And remember, it's not just about the price. Consider your closing date, earnest money deposit and loan type. The bank will consider it and you should too.
Be prepared to do more legwork to get to the closing table. Its in your best interest to have an expert real estate agent working on your side. Your realtor (a good one) is your best advocate; trust what they share and work with them, not against them. Likely they're looking to get you the property you want and they'll need your help to do it. If they share you'll need to have the utilities turned on in your name for the inspection... get on the phone and get those utilities turned on in your name without delay. Prepare yourself to be asked to perform tasks that may seem unconventional. Unlike working with a traditional seller- you don't have a partner in the bank. This means thinking outside the box and means working with your realtor to make it happen.
Leave the complaining for the other buyers. You may get frustrated but it will pass. Do yourself a favor and swallow it now - current conditions means not expecting old fashioned customer service from the banks or their representatives (aka- the listing agent). Their approach will be coldly systematic, harshly automated, highly regulated, extremely back logged and bottlenecked. Make it easy for them to work with YOU. If you don't you'll probably find yourself back in the car looking for another home.
Buying a foreclosure can be a smart financial move for you and your family. Knowing ahead how to position yourself and how to approach this new market is imperative. On that note, how do you know if you have the right realtor? Simple. Ask them about their foreclosure buying strategies. If their reply sounds traditional, easy-going and non-aggressive or wishy-washy... find another realtor.