Foreclosures account for appx 43% of sales 2008 over 2007 numbers. The fastest moving price point is under $250k. Multiple offers are rule rather than exception as good deals are being sought by many. Banks do not like to multiple counter their many offers. They want "highest and best" in most cases. However, note, banks will make repairs! You will sign the as-is but if you have a good Realtor on your side you can get some major items taken care of. Do not expect the small stuff. Banks want to see that you are well qualified. You should have a complete package to submit to the listing Realtor and build a rapport with them (your Realtor should do this) so that you have all data to position yourself as top contract (yes, you can negotiate this too) and note that in many cases you may be requested to have the utilities turned on yourself for your inspections so some out of pocket costs that are not customary might be involved on bank owned property as well. You must not be emotionally attached...you must be prepared to pick house 2 or 3 if necessary. It is a process but is easy to do if you can answer all the questions about your goals and then be ready to go after them when they are in front of you. This you should expect to discuss during your initial consultation with your Realtor...if they are not interviewing you then they might not take care of you the way you deserve. Foreclosures can be exhausting but should be a great experience when all is said and done as long as you partner with the right parties.
I am available for questions. I don't mind
1) Some foreclosed properties have special financing if you go with their lender (You are not required to go with their lender). For example if you qualify for a 6.25% interest rate through you lender, you may bet a lower rate or lower fees if you go through XYZ Lender who also is the seller of the property.
2) Sometimes it is a "race" to get the property. I recent was told by an agent who handles bank foreclosures that "We submit the offers in the order that they arrived and the lenders often look at the first offer, if the terms are acceptable then the other offers are not even looked at even though the offers may net the bank more money". This is because the banks/lenders are overwhelmed with work and they way "yes" we'll take it and ignore the rest.
3) Some banks are "sitting" on offers with slow responses to see how many and how high of offers they can receive on a property. I have experienced this situation too.
4) You can expect a lender on a bank foreclosure to counter your offer with all of their own terms.
5) You might get some items repaired by the lender.
Bank owned foreclosures and repos are usually priced accordingly. For example if a home in "Good" condition is worth $250,000 in todays market and a foreclosure comes on the market that is the same exact model, but it needs new paint, carpet and a few minor repairs. Let's say for example that in order to bring this home up to "Good" condition it would take $12,000. The bank might price the property at $213,000 and if a buyer but the $12,000 into the property, then they would have a potential investment of $225,000 which is $25,000 less than a property in "Good" condition saving the buyer money.
Don't expect to offer $185,000 on the home that is priced $213,000 - you will probably get rejected.
Bank foreclosures can be a good buy, but do your homework, have all inspections completed and know what you are getting into.
http://www.623repos.com Bank owned homes in the west valley.
Allow me to just add to this thread. Take a look at the articles in this series on short sales and foreclosures. http://homebuying.about.com/od/4closureshortsales/qt/04074cl
I've referred many of my clients to these articles. I've also set expectations. In my area, we have a very brisk and competitive market for foreclosures. Many of these listings get multiple offers; so the advice is to always put your best and highest offer. If your offer doesn't get accepted, be prepared to move on and find something else.
Bottom line is that if the property you identify sounds like a good deal/steal, chances are some other folks are seeing it, too!
Get a professional to help you. This is not for the faint of heart, the uninformed or the inexperienced. You should always have an advocate on your side. Hire a realtor!
Good luck to you.
Step 1 - Find a local Professional(REALTOR) to help you in this process. Don't attempt to go at this alone, you will find yourself both frustrated and discouraged.
Step 2 - Decide what purpose your foreclosure purchase will fill.(i.e., fix-n-flip, owner occupy, 2nd home, rental, etc.)
Step 3 - Create a realistic plan of attack; of what type of property you will be purchasing, where it will be located, details of how you want to present your offer.
The remaining questions can be answered during the process.
1) You get an inspection period.
2) You have some negotiating power.
3) You can purchase with financing (cash only at trustee sale)
Any other questions, please reference: