12 Facts Nobody Told You When Purchasing Bank Owned Foreclosed Properties
What to expect when purchasing Bank Owned Foreclosed Properties
1. In many instances the home will sell AT or OVER the asking price. If they list the property well under value right out the gate, get ready, there will be a flock of people with multiple offers. It's like eBay, John isn't going to let Paul buy the house for pennies on the dollar without putting in a higher bid. Sometimes the house ends up selling for more than market value, just because of the excitement and emotions of multiple offers. The banks will list a home priced below true market value, as an aggressive starting point to attract multiple offers and they are guaranteed the house will sell within one week. When multiple offers occur on a property, they will ask all buyers with offers on the property to then bring their "HIGHEST and BEST offer and the best offer gets the home.
2. Banks accept offers within 5%-10% of asking price within the first 30 days on the market, NOT 50% of their asking price. The most common misconception is that banks are desperate and will take anything. NOT TRUE! The banks will reduce the price every 30 days usually until the house sells. The bank will do one of three things after they receive your offer: They will REJECT your offer, if they feel you are not a serious buyer, ACCEPT your offer, or COUNTER your offer. While these negotiations are happening the bank will be looking at all other offers that come in and they can accept any other offers.
3. The bank will look at the how you will be paying for the property. Cash is always best. When financing they look at the type of loan you are financing the mortgage with: Conventional, FHA or VA, and the amount you are putting down on the property. Conventional mortgages can usually close sooner and have the least amount of contingencies.