Purchasing a foreclosure home; things to consider

With so many foreclosure properties here in the Valley and around the country; I thought I would be useful for me to share a few things from the lunch & learn class I attended yesterday.  It was on how to write a good contract on a foreclosure property.  The training was given by Sandy Lezalla and Jeannie Regan  both with John Hall & Associates.  They have been working with the banks and doing foreclosure sales for years. 

The first thing they wanted us to share with our clients is the fact that the bank is only interested in the numbers.  The banks work with a one page automated submittal program that summarizes the offer details.  The listing agents fill in the desired details and pushes send.  The banks want to know the potential buyers names, offer price, down payment, earnest deposit, loan type, and what fees they are being asked in the offer to pay.  That is it.  It boils down to the best value for them.  The offers being accepted may not always be the highest price.  Closing date, cash purchase, possible complications with the buyers loan (based on fees the bank is asked to pay) all come into consideration. The bank is looking at their net, speed of closing, and lack of complications.

A few other things to know is many banks will not look at any offers until the property has been active on the market for a min of 5 days.  This allows for multiple offers to be received for their review.  So the early bird, and the first in line is not of consequence.

We asked what I feel to be the most important question: What price difference from the MLS asking price are the banks accepting? Their answer was 5% under list price or better.  Anything less than that, many times, does not get a response back from the bank.

Multiple offers are more and more the norm here rather than the exception, and many times the properties are going for over asking price.  Be sure to submit your highest and best price for the property, the bank rarely counters.

Other Related Posts:
• Considering buying a Short Sale?
• It’s a Buyers Market. Or is it?
• Short Sales, info for the Buyer
• Castles in the Sand
• The Foreclosure Transaction and what to know - part 3