REO Secrets for Buying Foreclosed Homes
With so many bank owned, foreclosed homes flooding the market these days, there are plenty of home owners and property investors out there just itching to get their hands on a bargain home, whether it be in Santa Cruz,Ca, or anywhere else.
The truth is, often, these homes are underpriced, but because everyone already knows that, you may find that instead of the easy sale you hoped for, you’re up against up to twenty other bidders – which is when things can get sticky for you and your dream home in Santa Cruz!
Usually, banks will simply accept the best offer, however, there are times when they will reject all but one or two, and ask those potential buyers to rebid. Whichever way it works though, getting your hands on that property you want in Santa Cruz at a bargain basement price is going to depend on a few key factors. Each lender will have a different process so be sure you agent finds out how it is likely to go. Banks do change their minds too depending on how many and the types of offers they get on a property. So you may think things will be handled one way and they aren’t. The bank like the seller of any home has prerogative on how or if they respond to offers.
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First things first – you’re going to need to have a starting point for your bid, so find out what the house sold for, what the foreclosure price is, and any other pertinent history, like loans and second mortgages. REO purchases may seem random, but you can bet your bottom dollar that the bank is already thinking of a number!
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Compare the property to other sales in Santa Cruz, or wherever else you are hoping to buy. Looking at what the market is doing in terms of home prices is a good way to get an idea of the ballpark figure you should be bidding – this is especially true if you’re up against a lot of competition! But make sure that you compare apples with apples, by looking at similar properties , and only in the recent past, or even current pending sales activity.
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Look at the listing agent’s history. Most REO listing agents work in one area, and for one or two financial institutions only. If you can search through their listing and sales history of the recent REO sales, through your own agent, you can see what their average difference between list price, and sale price is. Once you have that, you’re sure to be on the right track!
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Check out the competition! If you’re bidding against twenty people, you’re going to need to offer more, if you want to secure the property. If there’s no one else bidding, you have a golden opportunity to bid keen, and get your dream home at a bargain. Be realistic, and make sure you know who you are up against!
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Leave the niggling until after the deal is done. If there are repairs to be done, they’ll probably be your problem, but problems found during an inspection may be up for renegotiation. Shortening the inspection period may also indicate to the bank that you are serious, and not just window shopping!
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Get pre approved. In fact, get pre approved by the bank that owns the property, and your own mortgage company. That way, there will be absolutely no doubt in anyone’s mind!
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Offer to split fees – if you are getting a bargain, you can afford to be generous, can’t you?
As you can see, there’s a lot you can do to make sure that your offer on that foreclosed Santa Cruz home of your dreams is the winning bid! So be proactive, and find your dream home at a bargain price!