So you want a deal? Buying a foreclosurecan get you a home at a good price but it may not be as cut and dry as you think. The banks are not very flexible and if you think you can lowball, think again. Here are a questions I am often asked when buying a foreclosure:
How Much Will the Bank Accept?
There is a lot of competition with bank owned properties so don’t think you can go in and low ball! The listing agents for bank owned properties usually list them pretty aggressively and if it is in fairly good condition, it is not uncommon for there to be multiple offers on the home. This can in many instances bring offers that push the purchase price up over the current list price. The bank is looking for the cleanest deal with the best price and terms. As your Realtor I would show you comparable sold properties within the last 3-6 months to help guide you to a strong offer.
When Should I Expect an Answer?
Usually banks will respond to an offer on a foreclosure within 2-5 business days. If there are multiple offers on a foreclosure, the bank will request all to resubmit your “highest and best” offer. This situation is not a pleasant experience for the buyer or the agent as it becomes a bidding war. The best plan of action when this occurs is to submit the highest amount you feel you are willing to pay and not worry about what the other buyers may do. If you don’t win the final bid you move on..there will always be another home.
Will the Bank Make Repairs?
Foreclosures are sold “as is” and the bank will not do any repairs. Banks are concerned with getting the home sold at the best possible price and cutting their losses. They do not have any motivation or resources available to make repairs. Most of these homes are managed by an asset management company and not one bank person has ever stepped into that home.
Should I Get a Home Inspection?
Yes, you should always get a professional home inspection along with a termite inspection within 10 days of contract acceptance. You don’t want any surprises to arise after you move in. The inspector’s job is to find out if there are any major problems with the home and what is required to keep the house maintained. If you do find something wrong and feel it could be a deal killer you do have the option to cancel the contract.
Looking for a buyers agent to represent you who is experienced working with foreclosures? Call/Text 480 888 6708 or email me for a quick response to your questions.
Hey Patti, you mention banks selling the homes “as-is” and not making repairs but let’s say they have accepted a offer with financing and then after the appraisal comes back we realize that there are “lender required” repairs. Do you see the banks working to get these types of repairs fixed so the buy can proceed with their financing?
-Justin, http://ElectricLoanOfficer.com
Justin, They may reduce price in lieu of repairs but the banks don’t want to fix anything. If bank owned properties are priced competitively , there are usually multiple offers on the property, with cash buyers winning the bid. I find if you are financing you are better off finding a home offering the HomePath financing. What would be an example of lender required repairs?