is for FORECLOSURE or is it.
How many foreclosures have you bought?
If the answer is none, one or two read on...
Everyone thinks they are going to get a great buy on a foreclosure
and you can - maybe 20-25% discount -but it depends on who owns it.
Banks or mortgage companies are the sellers in most foreclosure
transactions and some set there own rules to play by.
You must be willing to walk away and go play with someone who
really wants to sell their home.
Here's a lender tactic that we're currently working on
This is not for the faint of heart. Here's the story...
Home has been on the market for over 200 days, we write a
contract, we negotiated the contract with the listing agent,
took 5 days, that's reasonable.
We docusigned the contract and sent electronically to the
listing agent immediately to get signed. It has to be in
Well, 10 days later we are still waiting for the contract to be
signed because 3 people have to sign it.
Usually when you agree on a contract you sign it asap to get the
ball rolling. Our closing is Dec. 21, 2007, This was on Dec. 6th.
Financing usually takes 30 days to close, but you can get it done
quicker if you know and work with professionals.
Why did they take so long to sign it?
Because the lender really wants to leave the property on the market so
they can receive other offers.
Why? So they can get a better offer! It doesn't matter if legally they are
under contract with you. Sound Right? Nah...it's deceptive.
But that's how they play...
The listing agent actually called us while we were waiting for the original
contract to be signed to say she had another offer.
What did we do?
You tell the agent to go work the other contract and
say good bye or hang up - you call their bluff - the listing agent
immediately called back and said she actually didn't have a contract
but might be getting one. It's a roller coaster ride...
Usually after the contract is signed you have 48 hours to get the
earnest money to the title company for the contract to be valid.
But this particular lender doesn't care about the contract.
They are following their own set of rules - no time is of the essence
or due diligence.
They don't even care if the earnest money is deposited, which is
the money that a buyer could potentially lose if they don't close.
A copy of the check is OK by them.
Which is OK - because you will not lose anything to try and buy it
except for your time and agents, but really you don't have a contract.
But why give $5000. to someone you already know doesn't play fair.
Just play it out and see if it closes.....
As of now, we are still waiting for a repair amendment to be signed
and it's suppose to close a week from Friday. What will happen?
Remains to be seen. This particular property has had 4 previous
contracts that didn't close - That's a Sign...
So how do you handle this craziness? Follow these points:
Have other houses to bid on
Do not fall in love with the house until you own it
Make sure you're getting a great buy for the neighborhood
If it doesn't work out, just move on.
Accept that the negotiations will be difficult but don't lose sleep over it.
Not all foreclosures are like this, it depends on who you're dealing with.
Good thing banks aren't in the full time business of buying or selling real estate,
because they just don't get it! They can just stick with lending the money, if
they can make a deal. This is a typical situation of why a property will not
close and come back on the market. Still want to buy a foreclosure?