Buying a foreclosed property can differ in many ways than other more standard transactions. All offers are contingent on financing and must be accompanied by a pre-approval letter. Some banks require a pre-approval letter from a certain lender, so be sure to read guidelines before submitting an offer. All cash offers require proof of funds with the letterhead of where the funds are being held and the buyers name listed. Actual account numbers can be blackened out, as long as buyers name is easily visible. Write your offer as seller chooses the title company as they have already started preliminary title work on these properties.
All offers must be written offers, on an As-Is contract only Some banks supply addendums in advance, and if that is the case it will be in the MLS as an attachment and should be signed and dated and submitted along with your offer. In most cases, however, the bank addendums are provided only after buyer and seller come to agreement. At that time, the bank will send their bank addendums/counter offer for buyer's signatures. Please note at this point, the bank has still not signed anything, and most likely will not sign until ALL forms have been signed by the buyer. Your offer is considered a pending contract until it is returned from the bank/seller with their final approval. In the interim, all offers that come in must be presented. When signing and initialing a bank addendum, do not alter it in any way or it will be rejected.
The usual time frame for a response to your offer is 3-5 business days, although sometimes a little sooner and occasionally a bit longer. Allow plenty of time for acceptance, and for closing the deal, 30-45 days in most cases.
If you are requesting seller concessions for buyers closing cots, pre-paids, or repairs, make sure those are requested in the written offer, as adding these things at a later date can be very difficult and most times impossible. If you are writing an offer for an FHA or VA purchase, please make sure the property will meet the standards for this type of financing. The majority of the time, repairs are not permitted prior to closing. Ask the lender if they allow the buyer to escrow their own funds for repairs.
Once you have a fully executed contract, time is of the essence. All inspections must be done in a timely manner according to the contract. Should the buyer not be accepting the conditions, written notice must be obtained prior to end of inspection period along with a signed cancellation and release form. Some banks will make earnest money non-refundable after the end of the inspection period. Read your addendums carefully.
Please note that bank owned properties closings are considered mail-aways, because the title companies that are used to close the transactions are usually located out of our general area. Some will send a mobile notary to the buyers agents office to close the transaction and then all documents are overnighted to the title company, but it is not considered officially closed until all original documents and funds are received.
A lot of foreclosures are going into multiple offer situations. Most buyers think that if they have the highest purchase price, they're going to get the property. Often this is not always the case. One of the big things they look at is the timeframe for the inspection. This is a contingency on the contract and the banks want it satisfied ASAP. Instead of the usual inspection period of 15 days, if you can do it in l0 days or less, the better. Another is the timeframe for closing. If paying cash they usually prefer the closing date to be no more than 2 weeks. A conventional loan can be 30 days and FHA 45. Just make sure you are prepared to close in the specified time or you could be charged $100 per day or more for each day beyond the original closing date. Also a larger deposit generally indicates a more serious buyer in their eyes.
Another point is to not go into another month. For instance, if you can close on the third week of the month it’s usually preferred. They usually don't like to close in the last few days of the month because it might have to be extended into the next month. The banks like to close out their books each month and not have to extend. This is especially true if it is the end of the quarter. Lower offers have been accepted because the closing date was the third week in the month.
The bank is making the decision as to whether they will accept your offer. They usually have a lengthy addendum which you will need to review with your Realtor and make sure you understand the ramifications of the conditions they require -- such as specific time frames and the "as is" condition of the property. It is always wise the have talked with a lender and received a prequalification even before looking for homes and specifically before making an offer, as most lenders require a prequalification letter to be submitted with the offer to purchase. There are presently many homes from which to choose and a majority of them are foreclosures, so now is a good time to buy.
There are three important steps:
1. finding foreclosed properties for consideration
2. identifying the right property to meet your needs
3. writing an offer
A real estate professional from your target location can assist you with all three of these steps and provide you with supplimental services as well. Contact an agent today,
Let me know if you would like to be emailed a list of the latest real estate foreclosures in the 93720 or the general Fresno, California area. Homes priced under $200,000 currently typically sell within the few weeks in our market. Homes priced over $200,000 depend upon the area and type for the speed of the sale. But, foreclosures are consistently priced below the market based on appraisals and should expect to sell within 4% of the listed price in the Fresno and Clovis area. You can email me at email@example.com with what you are looking for and I can send you the best available choices for you to review.
But, prequalification is definitely the first step. You must have a prequalification from your lender prior to making any offer on a foreclosure. I can recommend qualified local lenders if you are not familiar with any.
The first thing is to get qualified. Talk to a few lenders, find one you with whom you can be comfortable to be open and honest. Check out their rates...and find out the best loan program for you.
Next find a good Realtor, one that can communicate well, and one you are the most comfortable. Make sure you have one that is a member of the local mls. Once you have done that you can go and look at houses.
A good realtor will show you forclosures, short sale homes, resale homes, and new construction. They will tell you the pros and cons of each house. While you are shopping, they will be narrowing down the perfect house.
Good luck! If you need any more help, you can contact me at firstname.lastname@example.org or call 559-300-0853.