If there is one absolute truth in life, it is that when given a choice, people will always choose that path of least resistance. It is human nature and unavoidable. And it should be an important consideration when you are making an offer on a short-sale, foreclosure, or REO property. People that work in institutions that are responsible for disposing of these inventories are like everyone else ... they have a lot of work to do and they do not like complications. So when making an offer on these properties, keep it simple.
1) Have the least amount of contingencies. Have your financing in place and make your offer all cash, or pay all cash and take a loan after closing. Do not make your offer conditioned on appraisal, study the market and price your offer accordingly.
2) Close as quickly as possible. Cash strapped financial institutions will always consider short time frames as advantageous.
3) Purchase "as-is, where-is" and base your bid accordingly. If you are unable to properly inspect a system or mechanical item, assume it is defective.
4) Never ask for closing costs or other items to be paid by the seller, figure those into your offer.
Here's where the human nature comes into play. What could be easier for the individual working at the bank than bottom-lining the offer price as the net price, and not have to follow up with inspections or appraisals, and get it off their desk quickly. Your offer will move to the top of the pile, with an excellent chance of success. Remember, an foreclosure or REO purchase is a simple business transaction, so keep the emotion out of it and you will succeed on your bids more often than not!
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All content, including text, original art, photographs and images, is the exclusive property of Coweta Fayette Real Estate, Inc., and may not be used without the expressed written permission of Coweta Fayette Real Estate Better Homes and Gardens Metro Brokers, Newnan Georgia. All information is believed to be accurate but is not warranted, Copyright 2003-2009. Richard Weisser REOS, E-Pro. licensed Auctioneer. 770-827-6225.
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Very good points thanks for sharing. I am going to pass this along to several of my Realtor Referral Partners.
Dave Woodson
www.indigofg.com & www.uwinfin.com
Thanks for this article. Very helpful. I like the tips, obvious points, but good reminders. With more and more of these properties out there, we are all going to have to face an offer like this.
Kim Kelley
Great Points, Good Blog
Gary Love
This is terrible advice. Your tips are ONLY useful in a "hot" real estate market. With the current disasterous market, most buyers aren't fighting to have their offer moved to the top of any pile. Following your advice in this market would mean accepting undue risk by purchasing as-is when unneccesary to do so, and paying more for a house that the bank is likely to let you take with a mortgage and several concessions besides. Wake up and read the newspaper.
If you bothered to check the date of this post, you would have noticed that it is nearly a year old ...
Also, you would have noticed that I said "If you are unable to properly inspect" not "Do not inspect"
Try reading the post before you jump to erroneous conclusions.
Great Article. Thanks for the Information. It should help my Real Estate Business in Utah!