 1). Only consider properties already owned by the bank. - Avoid properties in the pre-stages of foreclosure. Instead, look for properties already owned by the bank. Once the bank has completed the forecloseure process and now owns the property it wants to get rid of the property quickly, and is in a position to make a fast decision. The longer the bank holds the property, the higher their costs. AVOID Short Pay properties. These rarely work out and you end up paying fair market value because you are still dealing with the pre-foreclosure seller, and that seller will be responsible for the payoff shortfall with tax liabilities and personal liabilities. This makes the pre-foreclosure seller unlikely to sell at a discount.
2). Personally visit and inspect properties that are available for sale similar to the Foreclosure property. - Many times you can find a premium, upgraded property at nearly the same price as the foreclosure property. Regular sellers have to compete with the foreclosures too and a property in good condition can be worth many thousands more than a foreclosure property which needs significant renovation. Have your agent show you similar properties before you make an offer on the foreclosure property. Refer to these properties as justification to get a lower price on the foreclosure negotiations.
3). Use your own Agent, not the listing agent. There is a built in conflict of interest or the perception of a conflict of interest when the same agent is representing both the buyer and the seller in a transaction. Both the seller-bank and you will feel better represented if you use your own agent, not the listing agent, when purchasing a property. Your own agent is more likely to be un-bias and does not have a relationship with the seller/bank. Your own agent won't have an inherent conflict of interest and shouldn't care if you purchase this property or another so long as you get the best possible house for your needs and objectives. You will NOT get a better deal working with the listing agent.
4). Make sure your agent's primary territory is where the foreclosure property is located. - A local agent knows the in's and out's of each neighborhood and can help you to avoid location issues. An agent from another area may not be familiar with that property and neighborhood. After you already purchased the property is a bad time to learn negative issues about the neighborhood! If your favorite agent is from outside the area, ask them to refer you to someone local. If they truly have your best interest in mind, this should be no problem, and they still get paid a referral commission.
5). Get Pre-Approved with the Seller/Banks approved Lender. The bank-seller needs to make sure you qualify. They may also want a chance to get your loan business. You will earn points with the seller-bank if you have been pre-approved with their preferred lender. This costs you nothing and your offer looks more attractive to the bank-seller. You can still use your own lender if you prefer but at least you made your offer look more attractive to the seller-bank which may help you to get a better price. Ask your agent to get you the contact information for the bank-seller's preferred lender.
6). Be prepared to close the escrow quickly, 45 days or less. - The bank-seller will give their best price for a quick, no-nonsense escrow.
7). Have your agent help you make a negiotation plan in advance. This speaks for itself. Make sure you know in advance what you are willing to pay. This makes it easier not to get caught up in the emotions of the moment, and ask your agent to remind you if you get off track.
8). Be prepared to act quickly. - If the property is truly a good deal, other buyers will soon make offers. Your best chance to negotiate a lower price is if you are the only buyer making an offer. If there are multiple offers, make sure you go in with your strongest offer up front. You rarely get a 2nd chance.
9). Property inspections. - You will be purchasing the property in AS-IS condition. You will only have a couple of weeks to have all your inspections completed and can back out of the transaction within that timeframe if you find the needed repairs are significantly more than you anticipated. Your agent should be able to recommend reliable & qualified Home Inspectors for every aspect of the property.
10). Use only one agent in your home search. - A quality agent will work hard to find just the right property but if they feel or discover you are working with multiple agents, your agent will quit focusing on your priorities in favor of their other clients. As with all professionals, work with the best you can find, treat their time and efforts with respect and they will take great care of you. |
If you are ready to put these secrets to work, and you don't already have a quallified agent to represent you, call us! There is no cost to you as our fees are paid by the sellers (banks).
Call us direct or use this contact form and we will get in touch with you. We will schedule a time to meet, discuss you objectives, throughly answer your questions, and if you are ready, start working on getting you a great buy on your next home or investment property.
We are NOT the Listing Agent on any of these properties!
Sandy Troxell & Craig Volding - Sandy & Craig
RE/MAX of Santa Clarita
Toll Free (888) 560-5633
Local (661) 310-1013
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