How to Win Your Bids on Foreclosed Properties

Tim Sojka - Katy Realtor / Broker - 713-822-2152

Most of my postings are short - this one is not because it overviews a complicated process. 

I am just a simple Katy Texas Realtor.  I mostly sell Katy Texas Real Estate.  I am mostly a listing agent who sells pretty property to people who want to buy or sell beautiful Katy Homes.  I mostly work with people relocating to Katy or being relocated from Katy to another city.

However, because of the training I received from one of the best foreclosure agents in Texas (here is a big thank you to Katy Realtor Stacey Sutter) I am also very proficient at winning bids on foreclosed properties.  My real estate investing clients win well over 2/3 of the bids they make on foreclosed properties.

Now this may sound like I am bragging.  I am not (many very experienced agents win a higher percentage).  I am simply saying that winning bids on foreclosed properties is a system.  If you understand the system you will win many bids.  If an investor or realtor does not understand the system they will not win many bids.

Now this system for buying is mostly based on the Texas Real Estate Contract - but many of these rules will apply across state lines.

The first thing you have to understand is the bid you put together is not for a human.  The bid you put together is for an institution.  They want to get things in an organized manner. 

Also this system is for buying foreclosed properties that are now in the MLS only (not for buying at the courthouse steps - that is a completely different system - and one I can overview if people ask for it).

Below is a step by step map for assembling your offer.  Also, remember that foreclosure agents speak a different language, you must understand the language they speak to be successful (ok this is an over exaggeration - but not by much).  When I use the term bank below - I mean the foreclosing entity - not your lender.

•1)      When submitting an offer understand that banks accept the highest and best offer (which does not always mean the highest offer).  The highest and best offer can mean the highest offer.  It can also mean the offer that has the most money down.  Sometimes it may mean the best written offer - because they can tell the agent that has written the offer understands the game.  In truth it is usually a little of all of these.  Put in the best offer you can, with as much money down as you can spare (this may be more important than the offer), written properly.  (I know you are asking how do I write it properly - that is later in this bog).

•2)      I have won bids simply because my offer was written properly.  My offer was not the best by about $10,000 but the foreclosure agent recommended to the bank that my offer be accepted because my offer had all the proper key terms.  They had also had a few contracts fall apart because of inexperienced real estate investors and inexperienced realtors.  So they were ready to just get the property sold.

•3)      Remember do not put in even numbers on your bid, this just looks amateur.  Do not put in a $120,000 offer.  Also do not put in $120,001 - this also looks amateur.  I have won bids on expensive properties by a few dollars.  Make sure your offer is a really strange number - it sounds stupid but it helps.  Try $120,147 or some random number you and your client select together.

•4)      Never ask the bank to pay for survey or a home warranty.  They usually will not do these things - and it will make your offer less attractive.

•5)      Try not to ask the bank for closing cost. Although in certain they will (Bidselect for instance) in general they will not.

•6)       The bank will not agree to mediation.  So check the will not box (this applies to the Texas Real Estate Contract - but I believe that banks in general will not agree to mediation).

•7)      The bank will not provide a sellers disclosure and are not required to do this in most states.  So check the box stating that they will not provide a sellers disclosure.  If there is not box write this into special provisions.

•8)      The banks will not provide HOA (Home Owners Association) information.  So check the box stating they do not have too.  This only applies in neighborhoods with a home owners association.  The bank will also not provide MUD information - so do not expect them too.

•9)      The banks generally cannot accept option money.  So do not fill out the option section of the contract.  The will often times grant you one week for free.  Use that week.  If they do not - just realize your Ernest money is at risk.

•10)  If you have done a deal with other foreclosed agents, name drop.  A lot of foreclosed agents know each other and if you have had a successful deal with one then they will assume you know the system.

Some other quick tips, take a real estate agent who has experience with foreclosed properties to lunch and ask them to go over the state contract and how to submit the contract properly.  Always ask for help on your first foreclosure offer.

Remember, biding on foreclosed properties is a system.  IF you follow the system you will be successful  Trust a small town Katy Realtor to tell you it can be done.

For more information about west Houston, the beautiful city of Katy Texas and the waterfront homes (our specialty), estate homes, leisure ranches, golf course homes and master planned communities within contact realtor Tim Sojka at 713-822-2152 or go to http://www.seetimsell.com/ to shop for a home online or to find out the value of your home. 

All information posted is the intellectual property of Katy Real Estate Agent Timothy Sojka and cannot be republished or used without his written consent.