| With all of the foreclosed homes on the market over | | | | home will appraise for and will not accept wildly high |
| the past year or two you would think it would be easy | | | | offers... unless, of course, they are all cash! If the house |
| to pick up a bargain. For those of you who have been | | | | happens to appraise at your inflated offer price, which |
| attempting to buy a bank owned home, nothing could | | | | is unlikely since appraisers are very conservative |
| be further from the truth. Many buyers soon find out | | | | these days and will be looking at the same comps you |
| that there are multiple offers on every home and | | | | were, you must decide if you want the house at that |
| getting their offer accepted seems impossible. The | | | | price or not, you can always walk away from the deal |
| key to landing a bank owned home is to present an | | | | because you are within your contingency time period. |
| offer that is appealing to the asset managers at the | | | | Another great idea is to include a large deposit with |
| banks - they are the people who decide which offer | | | | your offer. This shows the bank that you are serious. |
| to accept. | | | | This is really a low risk strategy for a buyer since your |
| So, what are these asset managers looking for? From | | | | deposit will be returned if you do not qualify for a loan |
| their perspective the best offer is an all cash offer. | | | | or if something really bad shows up in the inspection. |
| They want to get the home off their books as quickly | | | | Keep a close eye on your contingency time periods |
| as possible and all cash means no qualifying for a loan | | | | and you will get your deposit back if you decide to |
| and no appraisal, the two things that are most likely to | | | | cancel the deal. |
| kill deals. So what do you do if you, like most people, | | | | One thing that always surprises me is when a listing |
| cannot buy a home all cash? You need to structure | | | | agent tells me my offer was accepted because it |
| your offer in ways that are appealing to the banks and | | | | was clean and everything required was provided, |
| make your offer stand out from the others. | | | | meaning the other offers were not! My partner is a |
| Do NOT make a lowball offer... you are just wasting | | | | listing agent for multiple banks and he cannot believe |
| your time. Think about it, if they are getting 15-20 | | | | how sloppy and inaccurate the offers are from |
| offers, what are the chances of yours getting | | | | so-called "experienced" agents, it is unbelievable! So |
| accepted if you come in well below asking price? I | | | | how do you make the offer clean and complete? |
| advise my clients to review the comps in the area, | | | | Make sure all of the required fields are completed and |
| carefully examine the condition of the home and pick | | | | all pages are signed and initialed. A good agent will |
| the highest price they are willing to pay for the house. | | | | always do this. If you are making an all cash offer, |
| This should be the offer price. Anything less will be | | | | include proof of funds such as a bank statement |
| outbid by someone else who is frustrated by losing out | | | | showing you have enough money to close the deal. If |
| on other homes! | | | | you are getting a loan, always include a copy of your |
| Another tactic that has worked for me is to bid over | | | | pre-approval from your lender. Also include a copy of |
| asking price, say 5%-10%. If your offer is accepted the | | | | your deposit check. Offers that do not have these |
| first thing that will happen is the appraisal. If the | | | | attached will not be considered. |
| appraisal comes in lower than your offer, the bank has | | | | Consider not asking for some of the items normally |
| a few choices; either lower the price to the appraisal | | | | paid by the seller, this again shows the asset manager |
| amount so you will qualify for the loan, ask you to | | | | you are serious and eager to purchase the house. |
| make a larger down payment, or cancel your contract | | | | Don't ask the seller to pay for a home warranty, the |
| and put the house back on the market. They want to | | | | NHD report or HOA transfer fees. Just factor these |
| get the house sold and they know the next buyer will | | | | costs into your initial offer and it will make your offer |
| also get the same appraisal, so you have a good | | | | stand out. What else can you do? You can shorten |
| chance of the bank lowering the price so you can stay | | | | your contingency time period on your inspection to 7 |
| in the deal. This just happened to me recently where I | | | | days. Banks like this because they will know sooner if |
| became the hero with my buyer when the bank | | | | you will be staying in the deal or not. Just make sure to |
| lowered the price by over $30,000! But don't go | | | | order the inspection right away to allow yourself |
| overboard with this strategy - asset managers are | | | | enough time. |
| smart and they know the ballpark range of what the | | | | Best of luck! |