The best deals continue to be foreclosures. When a foreclosure hits the market most often the asset manager has a price range that they can accept offers,and a time range for that price.
For example if a home goes on the market for $200,000 and someone makes a $180,000 offer the next day it is unlikely that they will get it. However if the home does not sell after a certain amount of time the bank will drop the price. They tend to try and hold close to the new price for a certain amount of time then if no sell they drop it again. The house may end up selling for $160,000 however the asking price would be down in the $170,000 range. The bottom line is the banks will continue to drop the price until it sells. This is something that many homeowners are unable or unwilling to do.
If you see a foreclosure come on the market priced well below the market value it will sell fast. Often they get multiple offers on a foreclosure, when that happens the bank ask for highest and best from everybody. They give them a couple of days and they will take the best offer. It is often ABOVE ASKING PRICE.
A WORD OF CAUTION ON FORECLOSURES
There are so many of them we are seeing some mistakes. I had one under contract for myself. I paid $350 to have the home inspected and had to pay to wire the earnest money to the attorney the bank required me to use to close. Come to find out when they advertised the foreclosure they advertised the wrong lender as foreclosing. This made the foreclosure invalid. I had to terminate the contract. They will refund my earnest money but I am out all my expenses. They are going to have to re-foreclose on the home.
WHEN BUYING A FORECLOSURE GET OWNERS TITLE INSURANCE. IF YOU CANNOT GET TITLE INSURANCE DO NOT BUY IT.
Do not try and get a head start on repairs if you are buying a foreclosure. The contract states that you are not allowed to do any work on the property until after you close. If you sneak out and start fixing it up and it does not close you are out everything you put into it and worse could be prosecuted if the bank chose to do so.
It is not closed until the money is transferred from the buyer to the seller and all documents have been signed by all parties.
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