What should Buyers know about Foreclosures?
1. The location. Buyers must accept that if they want to capitalize on this amazing market, they have to work with an Agent that knows the inventory! Your Buyers agent should be able to help you understand not only the immediate development that you are considering, but all the surrounding areas that will affect the resale price of your investment in the years to come.
2. Foreclosures don't hang around. In the Coachella Valley where I live and work, price/sf and location are driving our market. If the foreclosure that you are interested in, is priced aggressively, in good condition and located in a desireable locationespecially with a view, don't wait! Write it up!
3. Banks have their Foreclosures priced to sell. In fact, they are generating multiple offers in my area, so when that property comes on the market, don't try to hardball the bank. If the comps support it, you might negotiate 10% or so below List Price. You'll just kill time and allow another more serious Buyer to steal your property right out from under you if you are set upon nickel and diming the Seller.
4. Buyers of Foreclosures need to pay attention to their Agents. Read that contract and all the Lender Addendums. Those timeframes mentioned are set in stone. Don't mess around. Get your deposit in, get your paperwork straight and get it to the proper parties. In the Coachella Valley, the Lenders can hardly wait for you to screw up..there's always another Buyer waiting for that Foreclosure!
5. All Buyers need Inspections when they are buying Foreclosures! It doesn't matter if you're a handyman, investor, smarter than anybody else on the planet, spend the $350-$500 or so and get an inspection! It's like getting a pre-purchase Vet exam on a new horse, you MUST know what to expect. If you know, you can deal with it. Either skip the deal, or negotiate the price, or just fully understand what is ahead of you as far as repairs.
Finally...after you close that deal, take a deep breath, celebrate with a cocktail and pat yourself on the back because you just bought a house for less than it would take to build it!