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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