Patience is a Virtue
Banks can be unaware of the asking price and since they have the last word on whether to accept or reject offers, buyers need to remain patient throughout the process, which can take months.
Don’t Get Caught in a Bidding War
Some foreclosures and short sales are put on the market at cut-rate prices to avoid expenses like property taxes, insurance, upkeep and utilities. Lowball prices attract dozens of buyers who can bid the property from a bargain to overpriced in short order. Kinow how much you want to spend and don’t exceed that price.
Know Your Market and Demographics
To help determine an appropriate valuation and asking price, be sure to research recent home sales in the area so you have a better idea of what properties are selling for.
Know What the Bank Wants
Some banks want strong buyers and some want strong offers. Some banks prefer large down payments, some want the highest price and there’s always the possibility for deeper discounts with all-cash offers.
Don’t Count on Repairs
Keep your expectations in check – the reality of the situation is that home repairs on short sales and foreclosures are seldom completed. The good news is that buyers willing to absorb repair costs are usually more attractive to banks.
Tour the Property
Foreclosed and short sale properties can be in deficient shape, making it important to tour the property with a qualified contractor to spot major problems and add repairs to the overall budget. Some issues can be minor, but others can be deal breakers. Know what you are getting yourself into.
Get Your Paperwork in Order for Short Sales
In short sales, there’s no leniency with the closing escrow date. Take care of all loan paperwork immediately after submitting your contract and be prepared a few days before the closing date. Then, if unexpected delays occur, a request for an extension can be made early enough for banks to consider them.