Everyone around me is loosing their home in foreclosure.
I mean it is really sad...
But Damn!
I can use some of my home equity to get myself a deal.
Ok this is sounding a lot like greed and this kind of wild speculation has put us in the mess we are in now. But to your point, one persons unfortunate circumstance is another persons bonanza. But it's not EVERYONE'S BONANZA.
I am not a foreclosure expert but having listed a number of foreclosures over the years, I know a few things about them. Some of the things I know, I learned the hard way. Anticipating a flood of CT foreclosures on the market in 2008, I thought I'd share a few tips for agents and buyers to make dealing with the bank foreclosure process a little easier. And while it might sound like I'm being a wise ass, I'm really trying to help you get a good deal. (See #3)
1. Complete all the bank requirements before submitting an offer. If the bank requires you to sign and initial 41 pages of documents, don't debate the subject unless you really don't want to buy the house. That is why they are called requirements.
2. Your attorney will hate the required bank addendum and try to change it. (See #1)
3. Don't assume a bank foreclosure is a great deal. In my experience, great deals are hard to find and most foreclosures are listed at fair market value. If you are willing to do repairs, you may find a good (maybe even great) deal on a house that needs work.
4. Although the price on a bank foreclosure may drop eventually, banks usually don't accept a "low ball" offer. In some cases there is even a secret formula of how much lower than the list price an asset manager can accept. Once the price is dropped, the formula is reapplied.
5. Closing dates can't be mushy. Time is of the Essence. Bank sellers expect you to close on or before the closing date of the contract. They don't accept excuses and will often charge a per diem if you are not ready when they are.
6. Keep your offer clean. Banks won't accept a contract littered with contingencies. AND if you have a house to sell, don't bother making an offer until your house is sold.
7. Be willing to Close quickly. I swear asset managers have little contests for most closings in a month. They always want to close THIS MONTH.
8. Asset managers are dealing with hundreds of properties. Don't expect an answer from the bank within 24 hours even if your offer requires that.
9. Don't get mad at the listing agent if you don't get a response quickly. (See #8) You WILL need the patience of a Saint but it really isn't the listing agents fault. Calling her 5 times a day to ask, "Have you heard anything yet?", won't get you an answer any faster.
10. While your offer is being considered, other offers may come in. This will make you really mad. (See #9)
10 1/2. Agents who list bank foreclosures are automatically eligible for Sainthood. OK, I just threw that one in for other agents but bank foreclosures are a lot of work. There is tons of paperwork and reporting. Good systems will make the job easier. Unless you are working with banks who have their own list of contractors, be prepared with a list of good, reliable vendors you can count on. And expect to be yelled at a lot. (See #9 and #10)
For This article and more good infor check out Realtor Linda Davis Gales Ferry, CT