10 1/2 Tips For Buying Foreclosed Property
Wisconsin Foreclosures and Sainthood
Matt Costello, a Keller Williams Realty agent passed along these tips for those interested in buying foreclosed properties: I am not a foreclosure expert but having listed and sold a number of foreclosures over the years, I know a few things about them. Some of the things I know, I learned the hard way. I thought I'd share a few tips for agents and buyers to make dealing with the bank foreclosure process a little easier. And while it might sound like I'm being a wise ass, I'm really trying to help you get a good deal. (See #3)
1. Complete all the bank requirements before submitting an offer. If the bank requires you to sign and initial 41 pages of documents, don't debate the subject unless you really don't want to buy the house. That is why they are called requirements.
2. Your attorney will hate the required bank addendum and try to change it. (See #1)
3. Don't assume a bank foreclosure is a great deal. In my experience, great deals are hard to find, and most foreclosures are listed at fair market value. If you are willing to do repairs, you may find a good (maybe even great) deal on a house that needs work.
4. Although the price on a bank foreclosure may drop eventually, banks usually don't accept a "low ball" offer. In some cases there is even a secret formula of how much lower than the list price an asset manager can accept. Once the price is dropped, the formula is reapplied.
5. Closing dates can't be mushy. Time is of the Essence. Bank sellers expect you to close on or before the closing date of the contract. They don't accept excuses and will often charge a per diem if you are not ready when they are.
6. Keep your offer clean. Banks won't accept a contract littered with contingencies. AND if you have a house to sell, don't bother making an offer until your house is sold.
7. Close quickly. I swear asset managers have little contests for most closings in a month. They always want to close THIS MONTH.
8. Asset managers are dealing with hundreds of properties. Don't expect an answer from the bank within 24 hours even if your offer requires that.
9. Don't get mad at the listing agent if you don't get a response quickly. (See #8) You WILL need the patience of a Saint but it really isn't the listing agents fault. Calling them 5 times a day to ask, "Have you heard anything yet?", won't get you an answer any faster.
10. While your offer is being considered, other offers may come in. This will make you really mad. (See #9)
10 1/2. Agents who list bank foreclosures are automatically eligible for Sainthood. OK, I just threw that one in for other agents but bank foreclosures are a lot of work. There is tons of paperwork and reporting. Good systems will make the job easier. Unless you are working with banks who have their own list of contractors, be prepared with a list of good, reliable vendors you can count on. And expect to be yelled at a lot. (See #9 and #10)
Matthew Costello - Realtor®
Keller Williams Realty
The MadCityDigs Team
Bringing Buyers & Sellers Together
mattcostello@kw.com
2601 Crossroads Dr, Suite 130
Madison, WI 53718
fax: 608-226-0824
mobile: 608-209-0019
www.madcitydigs.com
www.madcityhomesearch.com
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