5 Surefire Ways To Let That Foreclosure Slip Through Your Hands

By
Real Estate Agent with Bob Leigh & Assoc., LLC

5 Surefire Ways To Let That Foreclosure Slip Through Your Hands
by Pam SimpsonCry Baby
The Kudzu Vine

This blog article is prompted by something I saw at Trulia Voices the other
day.  A buyer was lamenting the fact that he had lost out on a foreclosure bidding war and of course, blamed his agent.  Not knowing the specifics of the situation, it could be that his agent was inexperienced in REO bidding.  But I find, more times that not, the buyer has unrealistic preconceived notions about purchasing a foreclosure that proves to be the real problem - too many late night "get rich quick" real estate infomercials.

1.  Don't Get Pre-qualified
ALL bank foreclosure and HUD home deals that I am aware of require that the prospective buyer be pre-qualified with a reputable lender before they will consider your offer.  This is a no-brainer.  It is so easy to get pre-qualified there is no excuse for not doing so.

Sleeping Baby2.  Sleep On It Too Long
If you are looking in a specific area because of the GREAT neighborhood, GREAT schools, GREAT (fill in the blank), then guess what - so is everybody else!  If you find a foreclosure home in a desirable area that is priced right - it's not going to last long.  While you are sleeping on it, someone else is writing the offer that is going to buy it. 

 

 

3.  Make a Low-Ball Offer
I know you want to get a good deal and if the home has been on the market for over 90 days, this might be an acceptable tactic.  This may also work in certain very depressed markets.  But, if the home just came on the market yesterday and is in one of those desirable areas, don't waste everyone's time.  The bank doesn't care that you think they should be happy you are going to take it off their hands for 50% of the list price.  Here lately I have seen foreclosure homes being priced under market value in order to encourage multiple bids.  And it works. The selling price ends up being over and above the initial listing price. 

4.  Refusing Involvement in Multiple Bids
If you are trying to purchase a well-priced foreclosure home with only cosmetic defects in that GREAT area of my market, be prepared for a multiple bid situation.  That's just reality.  Usually the listing agent will provide a form that discloses you are in a multiple bid situation and gives 3 options: withdraw your bid, amend your bid or keep your bid the same.  Its called the "highest and best" form.  Here is what I advise my clients.  Before we even make the offer, I want them to have a number in mind that is their "highest and best".  If we find ourselves in the multiple bid situation, we already know what we can do.  I know it's difficult, but try to think about it logically.  If you hold out here to try and save a few dollars and lose out on the house, you will be kicking yourself later on.  If you went with your pre-determined highest and best offer and you still lose out, at least you know you did all you could.  Only you know your comfort level when it comes to how much you are willing to pay for a certain house.  Don't feel bad about making a wise financial decision for your family.  There are other homes!

Listen

 

5.  Not Listening To Your Agent
If you are working with an agent (preferably a REALTOR) who is experienced in the oddities of purchasing foreclosures, LISTEN TO THEM!  They will do market analysis on the area to see how the foreclosure house you want stacks up.  Quit listening to those national real estate "gurus" who don't know the first thing about your local area. 
________________________________________________________________________________________________

FOR BUYERS:  Buying a Foreclosure, Finding a Home, Loan Info, Tax Credit, Interest Rates

FOR SELLERS:  Pricing, Selling Tips   

LOCAL COMMUNITY INFO:  Tate County Community, Memphis Community, Southaven Community

MARKET REPORTS:  Foreclosure Report, Hernando MS Report, Olive Branch MS Report, Tate County MS Report

REALTOR STUFF:  NAR, Real Estate and Media, Real Estate Agents

OTHER:  Rural Life, Breast Cancer Awareness, Angel Food Ministries, Property Rights, Auctions

 About the author:

Pam Simpson is a Broker-Associate with Bob Leigh & Associates, LLC in Northwest Mississippi
Copyright© 2008 By Pam Simpson, All Rights Reserved...**5 Surefire Ways To Let That Foreclosure Slip Through Your Hands**

Disclaimer:  All information provided by this author is based on information collected from several sources and is believed accurate but not guaranteed.

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Rainmaker
413,193
Lisa Heindel
Crescent City Living LLC - New Orleans, LA
New Orleans Real Estate Broker

Nicely done, Pam.  #5 is my favorite - too many of today's buyers think that every seller is desperate and that every bank is willing to give away a house because of the things they hear day in and day out on the news.  Unfortunately, some of them have to learn a hard lesson before they see the light!

Oct 31, 2008 07:46 AM #1
Rainmaker
116,152
Pam Simpson
Bob Leigh & Assoc., LLC - Senatobia, MS
GRI, Broker-Assoc.

Lisa - thanks for your insight.  The sad thing is some never see the light and just can't figure out why they keep missing out on these homes.

Oct 31, 2008 09:37 AM #2
Rainmaker
276,549
Eric Egeland
RE/MAX SUBURBAN - Libertyville, IL
SFR, e-PRO, CDPE

Thanks for the post Pam,
You are 100% right...couldn't agree with you more

Oct 31, 2008 12:42 PM #3
Rainmaker
116,152
Pam Simpson
Bob Leigh & Assoc., LLC - Senatobia, MS
GRI, Broker-Assoc.

Eric - Thanks for reading and commenting.  Unfortunately, I am writing what I know about.  Have seen all of these in action.

Nov 01, 2008 12:04 AM #4
Rainmaker
412,839
Andrew Monaghan
The Monaghan Group - Glendale, AZ
CRS, GRI, EPro Associate Broker

Great post, i see time and time again buyers that loose out on homes becauuse they dont or wont listen.

 

Nov 01, 2008 05:38 AM #5
Rainmaker
116,152
Pam Simpson
Bob Leigh & Assoc., LLC - Senatobia, MS
GRI, Broker-Assoc.

Andrew - Thanks for your comments.  I wonder if all of the information and misinformation available in the media and on the internet contributes to that.  It seems like people more readily believe someone they hear in the media than the real expert in their community.

Nov 01, 2008 09:29 AM #6
Rainmaker
171,862
Vicki Pedersen
Pedersen Real Estate - Riverside, CA
Providing Exceptional Real Estate Service

Pam, Good post.  These are all things I've seen in working with buyers over the last year.  I agree that a lot of buyers don't listen to their agents.  The other thing I've experienced is buyers saying that they don't want to put an offer in on a house where there are multiple offers.   They hope that they will be the only ones putting in a bid for that house that is perfect for them.  They find out quick that is not the case.  It takes a lot of patience and educating buyers - especially first time buyers.  But it is rewarding when they get into a house.

Nov 03, 2008 02:47 PM #7
Rainmaker
116,152
Pam Simpson
Bob Leigh & Assoc., LLC - Senatobia, MS
GRI, Broker-Assoc.

Vicki - Thank you for your comments and wise observations.  I find myself having to "re-educate" those buyers who have already received misinformation from from the media and get-rich-quick scammers. 

Nov 03, 2008 11:46 PM #8
Rainmaker
286,747
Tina Maraj
RE/MAX Cornerstone - Fullerton, CA
Top Agent in Fullerton 2016-2018 714-403-7901

Buyers are taking this too lightly. We need to keep telling them how important it really is to be prepared before they find their dream "REO" home.

Nov 04, 2008 02:19 AM #9
Rainmaker
116,152
Pam Simpson
Bob Leigh & Assoc., LLC - Senatobia, MS
GRI, Broker-Assoc.

Tina - thanks for the comments and I definitely agree about preparation.  That is key before going out to look at REOs.

Nov 04, 2008 03:21 AM #10
Rainer
36,261
Jake Forbes
United Country Forbes Realty & Auctions - Hertford, NC

Thank you Pam for a very informative blog.  I learn something almost everyday on activerain. 

Nov 04, 2008 07:52 AM #11
Rainmaker
116,152
Pam Simpson
Bob Leigh & Assoc., LLC - Senatobia, MS
GRI, Broker-Assoc.

Jake - I, too learn something new every time I read a blog here.  It's a great place to not only learn some new things (and be reminded of some not so new things) in real estate and also about how to use the internet to reach out to consumers.

Nov 04, 2008 12:37 PM #12
Ambassador
517,846
Pam Dent
Gayle Harvey Real Estate, Inc. - Charlottesville, VA
REALTORĀ® - Charlottesville Virginia Homes / Horse

Pam - I have also had problems with buyers who think that they can lowball on foreclosed properties.  We are seeing multiple offers.  I had one client who made offers on 3 forclosed homes and finally got the last one because he decided that he really wanted that one and offered more than the list price..

Nov 22, 2008 03:05 PM #13
Rainmaker
116,152
Pam Simpson
Bob Leigh & Assoc., LLC - Senatobia, MS
GRI, Broker-Assoc.

Pam-thanks for commenting with your experiences.  It's good that your client finally came to the realization that he was going to have to get serious. 

Nov 23, 2008 05:50 AM #14
Rainmaker
54,801
Phil Hanner
Keller Williams - Daytona Beach, FL
Phil at http://www.findahomeinportorange.com/

Great post. Could not agree more with your list.

Dec 12, 2008 02:07 PM #15
Rainmaker
91,655
LaShawn Norden
Keller Williams Heritage Realty - Longwood, FL
REALTOR, (321) 377-0157, Your Real Estate Advocate in Central FL

Pam~This is a great post....very informative and I'm sure, quite relevant in most markets. Florida is no different...we are seeing multiple offers on REO properties. Usually, it only takes a buyer once or twice of losing out though before they realize that what we say is to be believed.

Dec 13, 2008 08:18 AM #16
Rainmaker
116,152
Pam Simpson
Bob Leigh & Assoc., LLC - Senatobia, MS
GRI, Broker-Assoc.

Phil & LaShawn:  Thanks for the comments.  I just now saw them.  LaShawn, it is kind of funny to see the light bulb go off when they realize we actually know what we are talking about.

Dec 16, 2008 11:56 PM #17
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Pam Simpson

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