Foreclosure in Tucson>Question Details

D., Home Buyer in Tucson, AZ

Why can't we seem to buy a foreclosure house in the Tucson area?

Asked by D., Tucson, AZ Thu Apr 2, 2009

We have been looking to buy a home in Tucson for the last month, however we've put 6 offers and not had a single one accepted. 5 of the houses have been foreclosures ...

1st foreclosure, the house was on the market less than a day, we put an offer in at 10k above asking. The next day, it had 4 more offers, and the bank didn't choose to counter ANY of them, they picked a cash offer that was lower than ours.

The next foreclosure came on the market two days ago, and we saw it within hours of being on the market and immediately put a bid at asking. Later that day, we heard there was another strong offer on the house, so we planned on increasing our offer using an addendum. When our realtor contacted the other realtor, he said not to increase the offer, that the bank planned on countering both of us with bring your best offer, so we waited ... only to hear that today the bank chose the 2nd offer without countering, and it was for the amount we planned on increasing our bid to. HELP!!

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Answers

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As a former REALTOR and an active investor, my experience tells me that you should bypass your current agent and submit your offers directly with the lising agent or their designated buyer's rep.

Late last year, I started buying foreclosures for investments. These properties were in terrible shape and not highly sought after. I submitted several offers through an agent I trusted and have worked in the past. Out of 7 offers, I got only one accepted. Some had other offers and some did not. Rather than try and figure why some of my offers were not accepted, I just moved on.

I belong a local invesment association and we meet regularly. We have several hundred local investors and we meet to discuss our real estate experiences. I brought my recent offers and how I was unsuccessful with a number of my offers. Turns out that another investor whom I know quite well bought two of them. Turns out he was contacted directly by the listing agent. Also he was told how much to offer. On at least one of those homes he closed, I was in first and his offer was not in for another 36 hours. We both offered cash and the same amount.

What should have happened in this instance all things being the same, we should have been notified of identical offers and asked to counter.

I am not saying your running into this scenario, but the point you should take away from this is the listing agent is actively seeking buers to represent both sides of the transaction. Take it to the source, hire a good home inspector, and good luck!
0 votes Thank Flag Link Wed Apr 8, 2009
In reality, all of the offers we made were at asking or above (up to 10k above). We didn't try to low ball any of the houses that we bid on. Also, the earnest money we offered was 3k (not sure if that is too low or not) and we never asked the seller to pay any of our closing costs.

Anyhow, we have had success! I hope that it holds up through the paperwork.

Thanks for all your answers.
0 votes Thank Flag Link Fri Apr 3, 2009
I agree with the previous answers you've gotten. Do the proper research on the value with your Realtor, and then make a solid offer, with good earnest money and a strong letter along with the LSR from your bank. I recently had multiple offers on one of my listings, where the Sellers had to decide between two buyers. One had a full loan preapproval, typical earnest money, and the buyer was putting 30% down. The other offer had a $500. earnest money, minimum down - asking the Sellers to pay all the closing costs, and it was missing the lender information and two other necessary addendums. (On top of that ---- the Realtor faxed the offer to my office Saturday night, without telling me it was coming, and with the offer expiring Sunday afternoon.) You can guess which offer the Sellers chose to work with!

Meanwhile...there are still plenty of foreclosure properties available, and both FNMA (Fannie Mae) and FHLMC (Freddie Mac) have well worked out systems to get their repossessed homes sold. Your Realtor should be able to show you what they have available. I have clients who are in escrow to buy a FNMA property, and the bank has been very reasonable to deal with. Many of these properties are selling at prices that more than justify the repairs they need, giving the buyers instant equity as soon as they get the homes.

You might also consider not restricting your search to just foreclosures. All the sellers are competing in the same market, and the foreclosures and short sales are driving the prices down for anyone who needs to sell now. There are lots of vacant homes available whose owners need their properties sold ASAP, and they've had to lower their prices to compete.

P.S. I am not speaking about short sale properties.

HowardRoth@remax.net
0 votes Thank Flag Link Thu Apr 2, 2009
I have respresented buyers in over 16 purchases of foreclosed properties in the recent months. I believe the key to writing successful offers is to check with the listing agent before the offer is written and submitted, you may already be too late so don't waste your time or your agent's. Be aggressive with your first offer. Banks list foreclosures at a certain price based upon numerous bpos, appraisals, etc. Usually decreasing the price after 30 days if no offers have been forthcoming. Don't think that just because it is a foreclosure you can under cut the initial offer. Your agent should know what price is appropriate. I have heard similar comments from other buyers but they were trying to low ball the initial offers. Please email or call if you want to discuss further.
0 votes Thank Flag Link Thu Apr 2, 2009
Wow! What a bummer. It could have been the listing agent also had the buyer? In any way, if your going against multiple bids, you may want to submit your offer within a few hours and send it with a strong offer, asking price or a couple of thou above, and earnest money that says your serious (not like $500). Also, checkout http://www.southwestalliance.com Good luck, hope you get your house soon!
0 votes Thank Flag Link Thu Apr 2, 2009
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