How do you bid on a bank-owned foreclosed home?

Asked by Gail, 19115 Thu Dec 25, 2008

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Isaac Bensus…, , 92037
Thu Dec 25, 2008
I am assuming that you have seen the property. A good idea, if you are seriously interested in purchasing the foreclosed home, would be to bring with you, short of a home inspector, a knowledgeable individual to take a good look at the home. If the inspection meets with your approval, since many Bank owned properties sell their foreclosed homes as is, the immediate next step, if you have not done this, would be to be pre-approved by a lender.

Most important; select a real estate professional to prepare your offer and submit it to the Bank. The selected real estate professional has to understand the market where the home is located and let you know if the property is a good deal, based on what has sold in this area on the last 60 days. Be prepared to be countered; meaning that the Listing Real Estate Agent in charge of the foreclosure, as it might be the case, would call your Realtor the same day or in the next couple of days and ask if this is the highest and best offer you are willing to give.

Also, be ready to move fast. Many of these foreclosed homes, in many areas get more than one offer. It helps if you have a good downpayment or if your offer is all cash, but if you have the income required to qualify for the loan and have more than an average credit score you have a good chance of getting the home. Set in your mind the highest price you are willing to pay for the home in the condition that it is. Good luck.
2 votes
Sandra Lauer, Agent, Charlottesville, VA
Thu Dec 25, 2008
You bid on it just the same way. You contact a realtor and they will submit to the listing agent your offer on the forms that the bank requires. The house is listed with an agent correct?
1 vote
Eddie Holmes, Agent, Tucson, AZ
Tue May 29, 2012
Find a Real Estate Professional to help you. They understand the processes and legalities involved in working with Banks and their representatives. I have successfully negotiated and closed on several bank-owned properties and would be glad to sit down to discuss with you.

0 votes
Spirit Messi…, Agent, Tucson, AZ
Sat May 26, 2012
Contact a local Realtor, have them show you everything that is available including short sales, REO (foreclosures).

Best of luck.

0 votes
Mary Ann Sc…, Agent, Hawley, PA
Sat May 26, 2012
You should contact a Realtor and they will place the offer for you after completing the necessary documents. Each Foreclosure company seems to have their own version of necessary documents.
Once you have seen the property, be prepared to move quickly. It helps immensely if you are already pre-approved for a mortgage. If your Lender cannot work within the time frame designated by the Foreclosure Bank, theForeclosing Bank will most likely suggest a Lender for you who can get you approved quickly.
0 votes
Dallas Texas, Agent, Dallas, TN
Thu Dec 25, 2008
Contact a buyers agent who will work with you tour property. Many foreclosures are distressed you want confirm property condition prior submitting an offer.

Mortgage broker need to provide you a lender approval prior to working with realtor, letter will be submitted with sales offer.

Not all offers you submit would be accpeted by bank be prepared submit several offers on other properties, with any bank drama not caused by listing/buyers agent, banks work differently than normal seller procedures.
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0 votes
Manu Kapoor, Agent, New York, NY
Thu Dec 25, 2008
It is like a regular bid, given written. To either an agent or the bank it self. Banks mostly give importance on how you hv structured the financing or it is cash deal.
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Joyce Barnes, , Tucson, AZ
Thu Dec 25, 2008
Hi Gail,

As far as bidding goes on a foreclosed home, you would bid as for any other. The important thing is to be qualified by a lender first so that you know you qualifiy for the type of loan you want and know that the property meets the qualifications for the lender. Not all foreclosures will qualify because of damage that may have occurred to the house either by digruntled homeowners or vandalism while vacant. Bank-owned homes are sold as-is meaning no repairs will be made. Most lenders want the home to be liveable at the time of purchase. For example, I have been to foreclosed homes where the furnace had been removed, so the home was not considered liveable. This property needed a cash sale. If you are using an FHA loan to purchase a foreclosed manufactured home, the home needs to meet requirements in how it is set up on the foundation to qualify, and it can not have been moved from another location to this resting spot to qualify! As stated in some of the other responses, having your own home inspection done is very important...or find out if a recent one has been recently completed on the property as part of full disclosure by the owner, in this case the bank. You may find reasons why a previous deal fell through.
0 votes
Kelli Yates, Agent, Auburn, CA
Thu Dec 25, 2008
All banks seem to deal with offers differently. I've had some that will get right back to you on your offer and others that will 'collect' offers to get the highest price they can get. Even though they DO say the sale is 'as-is', ALWAYS get your own inspections on the property! While the banks won't pay for any problems found, it gives you the full picture of the property and also allows you to back out of your offer due to findings. Remember that most homeowners who are foreclosed on were foreclosed on due to inability to pay their many of those people either hadn't taken very good care of their homes and/or have trashed the homes out of anger. You may find many hidden issues with the homes that even the banks are unaware of.
0 votes
Yvonne Coelet, Agent, Show Low, AZ
Thu Dec 25, 2008

You make an offer on it just like any other home for sale. Just know that the banks take longer to respond to offers. If the home is priced to move, you may find that there are multiple offers on the home. The bank can then decide to counter either one of the offers or ask both buyers for their "highest and best offer.". Through your realtor you may want to find out if there are any other offers on the home (or if another is on the way). This can help you offer what you truely want to pay for the home rather than get caught in a bidding war.

Keep in mind that even though the bank says that they are selling the home "AS IS" they can't prevent you from conducting your inspections. Since you won't have the home's history from the original owner you will still want to know what you are getting into.

Good luck!
0 votes
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