Search
Foreclosures FREE For 7-Days!
Free access for 7 days, try it out! No strings, no contracts, no
hassles and you can cancel at any time. Hurry! Foreclosures sell fast.
Visit RealtyTrac.com. With virtually every Bank, Government and
Institutional property you'll find your next home waiting for you
Want
to Be Taken Seriously in the Foreclosures Market? Make a
Realistic Offer!
By
Rick Sharga, Vice President of Marketing for RealtyTrac
It’s
no wonder that the foreclosures market is gaining popularity among
first-time buyers and real estate bargain hunters alike.
Foreclosure properties can often be purchased at 10 to 30 percent less
than their market value, making them an attractive investment in a time
of soaring real estate prices.
But
despite what you may see on late-night cable TV, investing in
foreclosure properties isn’t a sure fire “get rich quick”
formula. Lenders aren’t likely to give properties away,
particularly in a real estate market where prices continue to
rise. And homeowners in financial distress still have some
leverage to negotiate the purchase price, particularly early in the
foreclosure process.
“You
have to practice both diligence and patience when looking to buy a
foreclosure property,” explains Jim Saccacio, chief executive officer
for RealtyTrac. “There really are some fantastic deals out there,
but you have to be willing to wait for the right opportunity, then make
a realistic offer so the seller will view you as a serious buyer.”
With
interest rates ticking upward, experts predict an increase in the
number of foreclosure properties on the market. Web-based
services such as RealtyTrac, give consumers access to foreclosure and
pre-foreclosure information that was previously available only to
professional real estate brokers and investors. Today, homebuyers can
use these services to identify and research potential home purchases,
as well as to find the tools and professional resources they need to
help them close the deal.
Sales
in this marketplace can move rather quickly, so there’s no time to make
uninformed or low-ball bids on properties in a half-hearted attempt to
save a few bucks. Nothing turns a seller off faster than a
low-ball offer on a fairly-priced property. In most cases, doing
so may irritate the seller so much that no further negotiations will be
entertained, meaning that you’ve essentially lost any opportunity to
buy the property. Conversely, making an uninformed offer that is
too high may get you the house you want – along with a never-ending
monthly reminder that you overpaid!
Find
out what the house is really worth
In
order to make a realistic offer, you first need to know what the actual
value of the property is. Look at the original purchase price and
recent comparable property sales to determine the current value of the
property. You can obtain information on recent sales in the area
from your realtor or via RealtyTrac’s Comparable
Sales Report.
Ideally, you should look at sales in the area over the past six
months. Then you can drive by each property on your list and note
its condition, size, appeal and location. You should also look
for properties that are currently listed for sale in the area and
research the same information for them. This information, along
with a thorough examination of the condition of the property, should
give you good feel for what it is really worth.
Find
out how much is owed
You
should also find out the amount the seller is in default and the
remaining loan balance. In order to determine a reasonable offer
price, you’ll need to know – at a minimum – how much money it will take
just to satisfy the debt to the lender (or lenders). Knowing this
will help you determine whether the property is within your price range
or unattainable considering your current finances.
The
estimated loan amount and default amount are included in the
foreclosure documents filed with public records, and RealtyTrac posts
this information online for subscribers. Additionally you can order
RealtyTrac’s Legal
and Vesting Report
or Transaction
History Report
to check for any other mortgage loans on the property.
Ultimately,
even if you’ve presented what you believe to be a fair offer, you’re
likely to receive a counter offer from the seller. That’s to be
expected as the negotiation process is a major part of real estate
sales in general – even foreclosures. Remember, a successful
negotiator in any situation must be informed, prepared and
realistic. Again, you must practice patience and diligence in
order to get the property you want for a price you are willing to pay.
Lastly,
it’s important to remember that real estate purchases can be rather
emotional, especially as you grow attached to the idea of owning a
particular property. It’s important to know what you are willing
to spend on a home, regardless of your emotional attachment to it, so
you need to set a limit and stick to it.
|
