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Foreclosures: How to particpate in a bidding war and not loose your cool!

By
Real Estate Broker/Owner with domoREALTY

I know, you are thinking to yourself this agent has lost her mind, it's a "buyer's market!" Yes in general the main theme is still leaning towards a buyer's market, but in 2009 we saw a trend with multiple offers on Atlanta foreclosures and Bank Owned properties.  Bidding wars can be confusing, especially when dealing with foreclosures. Listing agents representing the banks are sometimes less than attentive (to put it nicely). Cold hard cash offers from investors with no financing contingencies are beating out most would be homeowners who sometime make offers for full asking price!  Atlanta isn't the only city dealing with hungry cash buying investors, the Washington Post recently wrote a very education article about Cash Buyers Triggering Bidding Wars.   

When you are looking to buy a foreclosure or short-sale do you homework. Sometimes it's ok to bid over the asking price. The value of the house depends on the other comparable sales that have sold within the last 6 months. So ask your Realtor to pull all recent comparables in the neighborhood then make your highest and best offer. This is a non-emotion transaction for thes bank. At the end of the day it just comes down educating yourself and making the right choice for your budget. If you get outbid on the first go around, don't get discouraged. There will be more foreclosures popping up on the market. If you make value and location your top priorities you can position yourself with some hefty equity and a good investment for your future.

Lisa Schmitt
Coldwell Banker Honig-Bell - Plainfield, IL

We were seeing the same thing this past fall in the Chicagoland area. Many of the local REO agents were setting lowball prices and starting bidding wars. it actually helped to show my buyers instances where this happened as well as neighborhood comps. It seemed that everyone kept their cool and didn't panic when they were prepared ahead of time.

Either way, the words 'bidding war' are great to hear!

Jan 10, 2010 02:51 PM
Ron Brown NMLS #270845
NMLS ID: 40831 - Federal Way, WA

I think the most important aspect is to realize there are many homes available for a bargain price, and not to "fall in love" with one during the bidding.

Jan 10, 2010 02:55 PM
Vanessa Reilly
domoREALTY - Atlanta, GA
domoREALTY, Homes for Sale - Atlanta

Lisa: Smart move when it comes to educating your buyers!

Ron: Your right. Rule #1, make sure your buyer's try not to get to emotionally involved in these bidding wars, or they will loose perspective.

Jan 11, 2010 12:07 AM