What You'll Need To Make It Happen
The process of buying a foreclosed property is nothing like a buying a standard residential home from a private seller. While the home is the same, your purchasing it from a seller who is concerned with their own position without consideration for the buyer. While this can be said of anyone selling a home, with banks it's purely about numbers.
That said, here are some pointers that will help you to be successful in purchasing a bank owned home.
1. While banks list foreclosed homes on their websites, most of those homes will also be listed with a real estate agent. The real estate agent listing the home is the best resource, bar none, for information concerning any of his/her listings. Information is king.
2. If you’re not pre-approved for financing, banks won’t even consider your offer. There are no exceptions to this. Save yourself time and get pre-approved first. Don’t work with an agent who allows you to submit an offer without pre-approval. It’s a waste of your time.
3. Hire a real estate agent to negotiate the deal. Do not deal with the bank directly. Find an agent who represents many banks and has experience getting these deals through. (you’re here and you have)
4. Your best chance of getting a good deal is not with a newer listing but with one that has been on the market for awhile. The banks aren’t in the real estate business and they don’t like owning it either. Having said that, they want to minimize their loses.
5. If you’re thinking of lowballing the bank you’re setting yourself up for failure. Most bank-owned homes sell within 10 to 20 percent of the listing price. If you want to get it done and be successful, don’t fool around, get it done.
6. Be patient. It will take longer than a traditional home sale to get a response from the bank. They work Monday through Friday and this results in longer contract review times. In addition, they are looking at hundreds of offers on many foreclosed homes.
7. Bank-owned homes generally sold in their current condition. Usually, the bank will not pay for repairs, upgrades or home inspections. Have a certified home inspector look carefully for damage or lack of home maintenance. When these homes are vacated by the prior owners, they are sometimes not in the best condition. Holes in walls to general disrepair is common. You may even find appliances and plumbing fixtures missing entirely.
8. The banks are in control. The sales contract may omit customary real estate terms or include others you are not familiar with. Once the bank accepts your offer, it’s usually final.
Take this list to heart, read and re-read it. It’s a completely different ball game out there right now. That will take an adjustment to your thinking and perception of how to buy a home.