You’ve seen them, as we all have: Foreclosure homes that are being sold for a fraction of the cost of market price. Who doesn’t want to hit on a good deal and get their future home or future rental property for 1/3 or less the price it would cost on the traditional market? But this also means you could be up against stiff competition.

It’s not unusual for some foreclosures to receive 15 or 20 offers. Sometimes the bank will throw out all but two offers and then ask the selected buyers to resubmit what is called “Highest and Final” offer. Sometimes the bank simply accepts the best offer at inception. So, how do you make your bid seen above the rest?

  • Ask your buyer’s agent to find out the bank’s purchase price on the Trustee’s Deed or Sheriff’s Deed. Generally, it is noted on the document itself, which you can get from the tax rolls or a title company. Compare that price to the price the bank is asking.
  • Most agents work for one or two banks. Some listing agents are exclusive listing agents for foreclosures, and they do not list any other type of property. Since foreclosure agents deal in volume, they typically apply the same pricing principles to all their listings.
  • Ask about number of offers received for that foreclosure. If there are no offers on the home, you can probably offer less than list price and get your offer accepted. However, if there are more than two offers, you will most likely need to offer above the asking price.
  • Get pre-approved from your choice of lender in advance.
  • Sometimes banks will pay for repairs, but typically will not agree to do so at the offer stage. If there are problems found during a home inspection, renegotiate after your offer has been accepted.
  • If other buyers ask for 17 days, for example, to conduct inspections, and you ask for 10, you will be deemed the more serious buyer.
  • If you offer over list price, bear in mind that the appraisal will need to substantiate that price. If you find yourself dealing with a low appraisal, you have options, so don’t despair. Remember, the bank will most likely run into this problem with the next buyer who obtains financing.

Related posts:

  1. Considering Foreclosure Property
  2. Fending Off Foreclosure
  3. What To Do With That Foreclosure
  4. Mortgages – Did The Tax Credit Save You From Foreclosure?
  5. Real Estate Tips – Winning With A Lowball Offer