FORECLOSURE REALITY CHECK.... Seasoned investors who buy foreclosures know the REO manager at the bank and get "off market" deals. They never have to bid or find a place to learn what's available.
FOR ALL OTHERS: The only "sellers market" in america is the foreclosure market. Don'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 "at market".
The REO manager has a short list of "cash/close in 2 day buyers", they always get the first right to bid. Then they have to wait for the "public auction" 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 "first timers" who continue to drive up the bid when they don't hear anything from the bank. Every time I see the "how come I haven't heard from the bank about accepting my foreclosure bid after 30+ days" on trulia, I have to let out a chuckle because he's so right. For those newbies, this is real. They know that when you don'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 that.... 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. Any realtor can help you drop a crazy offer.
2. You are attempting to make a deal in a house covered in a cloud of bad energy, don'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 "my 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?" I always get responses, better prices and positive energy into the home.
Think of the amounts you are seeing for some of these homes like the one cent starting bids you see on ebay for a brand new ipod or iphone. We all know that nobody will really wind up selling these things for a penny but they sure do attract a whole lot of attention when the auction shows up.
This is the same kind of thing. Offering a foreclosure at a stupidly low price is just another way of trying to attract attention to the listing. The home may sell for under value and in some very rare instances will sell for way under value but in those cases the winning purchaser is not usually a private party looking to buy the house to live in. Investors are usually the ones that are able to get these really good deals simply because they usually have something that the average homebuyer does not - a whole lot of ready cash to plunk down and extremely favorable terms.
I am not saying that you should not look into homes with these fire sale prices being advertised, but I would strongly urge you to do so only with the help of a skilled, intelligent and extremely competent Realtor on your side to protect your interests.
There is no advantage to the buyer, in most cases, to have the seller's agent represent them in the transaction as well. I am not saying that you won't both have a good Realtor in your corner, but it is a whole lot easier to play the game when you can clearly tell who is on which team.
Also, remember that as a buyer the services of a smart, skilled Realtor cost you zip, zilch, nada. But despite the old adage that you get what you pay for, a good Realtor can save you thousands and sometimes tens of thousands of dollars, hours of irritation and the most valuable thing you have of all - your precious time.
If you are in need of someone to be in your corner and help you get the best deal that you can get, give me a call.
Take care and have a wonderful day!
Tisza Major-Posner, Realtor, Keller Williams (909) 837-8922 or (213) 392-4084
There are several fees and probably too many to list in this forum. I'd be happy to sit down with you and discuss the specifics if you have a property designated. It is all based on price.
I can also have a formal estimate created by our in house lender Thomas Bayles and a formal estimate on your closing costs prepared for you by our escrow company Pickford Escrow.
When would you like to meet?
Prudential California Realty
Pacific Design Center- West Hollywood
8687 Melrose Avenue, Suite G271
West Hollywood, CA 90069
323 466 5358 Offc.
213 804 4245 Mobile
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