FORECLOSURE REALITY CHECKâ€¦. The only â€œsellers marketâ€ in america is the foreclosure market. Donâ€™t expect any deals from a foreclosure as the bidding process brings 20-30 people to bid on almost every deal. A deal that was already priced at market. For government foreclosed homes, by law, they have to be priced â€œat marketâ€.
The REO manager has a short list of â€œcash/close in 2 day buyersâ€, they always get the first right to bid. Then they have to wait for the â€œpublic auctionâ€ Which drives up those prices. After a 30-60 day period. Then the REO picks the best bid. Sometimes, only sometimes does a REO manager take a property directly to a buyer he knows peronsally. Why should he, he has a bunch of people bidding and driving up the prices.
My REO manager friend likes to joke about all the â€œfirst timersâ€ who continue to drive up the bid when they donâ€™t hear anything from the bank. Every time I see the â€œhow come I havenâ€™t heard from the bank about accepting my foreclosure bid after 30+ daysâ€ on trulia, I have to let out a chuckle because heâ€™s so right. For those newbies, this is real. They know that when you donâ€™t hear from them that a large percentage of people drop a second or third offer higher than the previous one. **WARNING, YOU ARE BEING TAKEN ADVANTAGE OF HERE**
You want a deal on a property right, everyone wants thatâ€¦. So the moral of this story is:
1. the 60 days you have to wait to hear from a REO, you could have made 2 or 3 better deals with a property that has been on the market for a long period of time. A good realtor will drop an 80% offer on a property and get one accepted.
2. You are attempting to make a deal in a house covered in a cloud of bad energy, donâ€™t be surprised when it rubs off. Personally I stay away from these for this reason entirely.
3. One way to get a deal is dropping a hand written note on ANY house in a neighborhood you want to buy that says â€œmy girlfriend and I want to buy a house in this neighborhood and yours looks cute from the outside. Do you know anyone that is looking to sell?â€ I always get responses, better prices and positive energy into the home.