I got your update on the foreclosure in Willo but by the time I saw it, the house was already under contract. What’s the best way to make sure I’m the one getting the house next time instead of someone else?
Thanks,
Pete, Phoenix AZ
Hi Pete,
Boy, there’s a lot to answering this question! First of all, I know the house you’re talking about (what a deal, eh?) and there were multiple offers on it over the weekend. I love when agents list foreclosed homes on a Friday afternoon, because it allows me to send the listing out to all of my clients and show it on Saturday & Sunday without having to ask for a rushed decision. Thankfully, banks still don’t work on the weekends so they can’t make any decisions until Monday morning!
In this case, the selling agent received 9 offers by Sunday evening and I had my fingers crossed that one of my clients would get this fantastic home. The agent called me on Monday morning (10:30 am) to let me know that the bank had passed over the largest offer (which was a substantial amount of money down, and financing for about 50%) to accept a lower offer that was all cash. I was happy to hear that my “Cash Guy” got the property, but sad to know that a couple who REALLY loved the house was going to have to keep looking.
I asked the selling agent why this decision was made, and that question lead to an hour long “eye opening” conversation to how some banks are making decisions today. Now, all banks are different so my intention isn’t to pigeon-hole them all into one huge lump, but this bank (Countrywide) goes a little something like this:
- If it’s a choice between cash and financing, CASH IS KING. If the contract is for cash, then proof of funds is required (copy of online bank statement is usually fine)
- If there isn’t a bidding war with cash contracts involved, then financing is an option. Buyers MUST be prequalified with a Countrywide lender in addtion to their own lender before any contracts are reviewed.
- Properties are sold AS-IS with no Seller Property Disclosure Statement or CLUE Report
- The bank chooses the Title Company
- There are a lot more “”rules” to buying an REO property and you can find some of them here – but, remember – all banks are different and all have their own way of selling their properties.
Helpful Tips when shopping for a Foreclosed property:
- GET PREAPPROVED! The REALLY great deals sell quickly and if you’re not ready, you’ll lose everytime. All banks require an LSR to be attached to the purchase contract, so call Mike or Andy (contact info below) and give them your information. It’s quick & easy and it’s FREE!
- Let me know what you’re looking for. I get updated information on foreclosures everyday as they happen – so when a great REO property is listed in our MLS, I know right away and send it off to everyone that I think may be interested in buying it. If I don’t know you’re looking, I can’t send the new listings to you! You can call me, email me or just fill out this questionairre
- Make your decision quickly! There isn’t always a lot of time to think about whether or not the home is right for you. Other buyers are circling the new listing, too – and speed is very often the reason that some win and others don’t. If you snooze… well, you’ve heard it before.
Thanks for writing!
Don
