You find a Lake Charles Foreclosure home for sale and it's such a good deal you decide to make a low ball the offer. This happens all the time and 9 times out of 10 the Buyer loses out on the house. There is a reason that foreclosed Lake Charles homes are priced the way they are.
Banks are not looking to profit when they list a foreclosed property, The bank just wants to get the property off their books, and more than likely the listed price is going to be close to what is owed on the house. If you are going to chase foreclosures, then you have to learn to play by the bank's rules!
Banks have a system in place when they list foreclosures for sale.
- The property will always convey in AS IS condition.
- Purchase will usually convey via special warranty deed with no title policy
- Seller chooses closing attorney/title company
- Seller will make no repairs
Remember the bank wants the house off their books they are tired of accumulating expenses!
As an experienced Lake Charles REALTOR and negotiator, I am used to looking at comparative Lake Charles homes and recent Lake Charles sold home data to inform my buyer's of market value. Buyer's trust and rely on me as their experienced agent of choice to guide them with my knowledge and advice when writing a purchase contract.
There are many factors that I take into consideration when advising Buyer's with a purchase opinion.
- 1. Will Buyer need closing costs?
- 2. Type of Financing
- 3. Length of Time Needed to Close
- 4. Inspection Days
- 5. What condition is the foreclosed home in?
- 6. Is buyer prepared to make necessary repairs if needed?
If a Buyer is obtaining a loan, an appraisal will be required. An appraiser may go out to the property and note the condition of the home and take photographs. The buyer's bank could require that repairs be made before approving the loan. Who will make those repairs? Buyer can choose to repair themselves and move forward with the purchase however, the bank may also require a second appraisal after completion of the repairs. Who pays for that second appraisal? Buyer does!
I not only spend time researching comparative values and conveying that information to my buyer but I also point out the costs buyer will incur and explain how foreclosures typically work and what they can expect.
For example if you find a $59,000 foreclosed Lake Charles home , you are obtaining financing and need closing costs I would not recommend dipping below the $59,000 price--you will lose out every time. You must remember if it's a good deal there will be competition and multiple bids so if you really want the home we have to come in with the best strategy. I have seen it too many times where the buyer low balls and loses out on a home. I am able to see what the house sold for when the house closes in the MLS and I discover that the home sold for $70,000 and the bank paid the buyer's closing costs!
This also applies to investors who are looking for homes to flip who find foreclosed homes. An investor may be able to pay cash and close quickly but the same procedure as outlined above still applies. I will still research the comps and advise my investor buyer with fair market value of the home. Perhaps it is a $150,000 foreclosure in a $235,000 comp neighborhood. That could be a good flip for the investor but I don't recommend low balling the offer, please don't waste time and effort with a $140,000 offer because that is probably not going to fly with the bank!
When making offers on foreclosed properties in Southwest Louisiana listen to the voice of an experienced agent so you don't miss out on that good deal! Together we can plan an educated strategy that will WIN an accepted offer!