TIPS FOR INVESTING IN FORECLOSURE ( USA )

How a good BANK OWNED property  comes on the market..

Recently, it seems like every time a good bank owned property comes on the market, it is like blood in the water with four, five or more offers coming in. If you want to have a chance at snagging one of these good deals away from the other sharks, you need to come prepared. I have prepared a sort list of things you need to have ready in order to write the best offer possible.

1. Make sure you are preapproved and have your letter with you. This will let you know what you can afford and also let’s the selling bank know that you are already approved and can buy the property in question.

2. Have current bank statements and your check book. You will need to write a deposit check and many banks are asking for proof of funds up-front with the offer.

3. Be prepared to go over asking price. If a home is worth $200,000, but only priced at $135,000, you can be sure that somebody else will offer full price for it. If you really want it, you will have to come in even higher. Most banks will give everybody the chance to come in with a ” Best and Final ” offer, but not always. Sometimes, your first offer is your only shot. Be prepared for this eventuality.

4. If your Realtor is an experienced agent who has dealt with REO properties, listen to their advice. Odds are they have been in a similar situation and they know what to expect.

5. If there are multiple offers, don’t ask for a home warranty, termite work, or anything that is not absolutely necessary. The more you ask for, the less chance you have of getting your offer accepted.

While there are many variables that can occur, keeping these five things in mind will help you get the property you want.

What about your credit SCORE?

Credit scores, on the scale assigned by FICO, range from 300 to 850.
Who has an 850 credit score and what can you do to get one?
Less than 1 percent of the population has a credit score above 800, so it’s very unlikely you will have an 850 credit score.
However, if your credit score is above 720, you will probably still receive the best rates.

How to make your offer stand out?

( Personal experience by Florida´s realtor )

Many times you feel that your current agent is not doing a good job because they have made multiple

offers on homes and finally they have not gotten one house.

Now for agents. There are so many numerous factors that are hindering the
realtors and clients do not understand it.

First, people want to see a particular home.

So the agent will call only to find out that the home really is not active .

Frequently, it has multiple offers on it.

The status really and truly should be changed to pending or backup or hold depending on the situation.

Many times, I can leave messages for other agents and they never get back to me because they are “too busy”aren’t we all.

The board of realtors will be fining agents for not putting homes that truly
are not active in their proper category so the other agents do not waste their time.

I called on over 40 homes and one 1 was truly available…

The offer you make needs to stand out.  What do I mean by stand out?

Well, first you need to make sure you are working with a reputable bank..,

So, get a pre-approval, not a pre-qualfication letter.

Also, when trying to buy a REO listing (Bank Owned) they do have you cross

qualify with their lender which is normal.

Many people do not understand this and get upset over it.  Just do it,

otherwise, your offer will not even be looked at by the bank.

Don’t ask for a lot of concessions.  By this I mean, don’t ask for closing costs if you don’t need them.

That will net less to the bank and someone may outbid you on a property.

If at all possible make your best offer.  I always run comparables for my clients

so they are not over paying.

One thing many people think is if they are the highest and best offer out there they certainly

You need to figure out what you can live with and not ask for on a home to make
your offer stand out.
And, you need to ask yourself how much you are ready to pay.
See the comparables that your agent should provide you, and if they don’t ask to see them.
Keep your offer as simple as possible and make sure it nets the bank or seller the highest amount possible and that should help you have a stronger offer.
The type of financing really matters to the banks these days for an REO listing or (Bank Owned).
Cash is best, but most people don’t have all cash.  Conventional financing is best over FHA/VA loans.
However, it is what it is and just keep trying.  The inventory has been down therefore, homes are
getting multiple offers.  You want to get over to see a house as soon as it is listed and make an offer right away, don’t wait or it will be gone.
Don’t blame your agent if he/she writes up your offer how YOU wanted it.  Remember, your agent

represents you and you need to make sure you are happy with it before it is submitted.  It is not

totally an agents fault, we must take responsibility for our own actions and not be so tough on the

agents.

~ by nliteam on June 26, 2009.