Foreclosure Bidding Wars...What Buyers need to know!

You want to buy a foreclosure you saw online or one you saw in your neighborhood. What is the first thing you do?  You call the number provided on the sign or listing.....but no one calls you back?  All you want is for someone to call you back, so you keep trying.  Finally...days later you get a call back and you are told that an offer has already been accepted on that great deal!  

             Lesson Number One:  Most Agents who handle foreclosures don't have buyers agents to handle all the calls they get on their foreclosures.....they  generally are too busy working hard for the bank they represent. Although they are interested in getting it sold, they also know that it is priced so low that they will get is sold fast anyway. Plus, they may call their preferred buyers (usually cash investors)first...as a buyer you would do better contacting another agent who is used to working with buyers who buys foreclosures....they will guide you through the process, which brings me to my next point.

The price of the foreclosure is so low and it is priced in your price range where, heck you feel you can compete cause you have that much cash.  Back up....first you need to know that if the price seems to good to be true, it is. The banks selling foreclosures have gotten smart....they often will price a home so low in an area where they know it should sell for a lot more.  Hence, the bidding war has begun, which brings me the second lesson.

Lesson Number Two:  If all the cash you have is the selling price, then you may be out of luck. Just because it is listed to sell that low, does not mean it will sell that low. It could double or even triple in price if it priced too low for the area. Be prepared for a bidding war. You will need to get more cash and show proof of funds if you want to get in the game.If the foreclosure can get financed, you need to have a competitive loan (not FHA) and remove unnecessary contingencies.

Now you were told that it was a buyers market.....but what you were not told is that it is really a bank owned sellers market..........and to compete, you had better come ready............there are good deals out there but you had better come prepared.