Writing Offers on Foreclosures

By
Real Estate Agent with Gayle Harvey Real Estate, Inc.

Writing an offer on a foreclosure is not the same as writing an offer on a privately owned home.  Banks are often not looking for the same things in an offer that your normal seller is.  In the Charlottesville, Virginia area we have historically had very few foreclosures.  At this time we still have many less that other areas of the country, but it is definately more than we have had in the past.  In my office there are very few agents who have participated in a transaction dealing with a foreclosure.  However, in this market there is a destinct posibility that you will be helping at least one buyer make an offer on a foreclosure and need to be prepared.

To begin with the banks are looking for a cash offer with a quick closing time.  Recently I submitted a full price offer for a client on a house that we did not get.  The bank accepted another offer for $15,000.00 less, but with a quicker closing time.  The listing agent  later told me that too many things can go wrong with a vacant foreclosed home, so the banks want to get them off their books as quickly as possible.

When you are writing the offer there are several things that you should know.  If you want a well, septic and termite inspection you should put in an ammendment that they must be satisfactory even if the property is being sold as is.  It is also important to state in the contract that the seller is to pay any past homeowners dues and taxes.  Also many banks have their own addendums that must be included with any offer.  These addendums usually state that they superceed the contract.  Because of this you will need to put in the addendum everything that you asked for in the contract.  When the addendum superceeds the contract everything that you asked for in the contract goes away and if you don't ask for it in the addendum you won't get it.

Many of the forclosures are seeing multiiple offers.  When this happens instead of negotiating back and forth,  the bank will ask each of the buyers to submit their best offer.  They will then choose which one they will accept.  If your client really wants the home, it is important to put in an escalation clause so that they will end up being the highest offer.

In this changing real estate market we need to become educated regarding the ins and outs of foreclosures in order to better serve our clients.

Pam Dent
Real Estate III
Charlottesville, Virginia
www.JumpintoGreenerPastures.com
www.Charlottesville.virginiablogpage.com

 

 

Posted by

 

 

close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the folder to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Groups:
Realtors®
VIRGINIA
Online Marketing Help Center
WHAT'S HOT IN VIRGINIA
VA-RAIN
Tags:
buyers
foreclosures
banks
real estate
virginia
charlottesville

Comments 14 New Comment

Anonymous
Post a Comment
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the woman to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Rainmaker
92,016
Lynn Johnson
Owatonna, MN Real Estate
Coldwell Banker Home Connection

Pam - Timely post.  I've written 3 offers in the last 2 months on foreclosures.  It certainly is a different breed of cat as compared to an owner occupied home.  You've provided many helpful tips for agents to keep in mind.

May 15, 2008 10:24 PM
Rainer
8,849
Frank Sauer
CENTURY 21 Garner Properties

This has been a good post, particularly for those who don't do REO properties on a regular basis.

Something else - the banks can be incredibly slow in responding to offers.  And once they verbally accept an offer they can be incredibly slow in signing off on their part of the paperwork.

The buyers, meanwhile, (particularly if they are non-investors) are becoming more and more agitated by the day and just don't understand why they haven't gotten the signed contract back and are confused whether the inspection period has or hasn't begun.

Some buyers will walk due to the delays and the stress and uncertainty.

 

May 15, 2008 10:49 PM
Ambassador
1,805,755
Chris Ann Cleland
Associate Broker, Northern VA
Long & Foster REALTORS®, Gainesville, VA

Pam:  While the banks are looking for quick settlements, make sure you have checked with you lender and title company to ensure that settlement can happen on time.  The bank can delay settlement and there is no penalty.  However, if your buyer is late, the charge is typically $100/day.  An underestimate in what time you need can be costly to your client.

Incidentally, here in Northern VA we've got a ton of bank owned properties.  They realize cash deals are few and far between.  In fact, I closed one recently that gave 6% seller concession....3% to Nehemiah to give the buyer the downpayment, and 3% to cover closing costs.  They aren't unrealistic, but just like any seller, they want the most money...and that does include the quickest settlement.

May 16, 2008 08:54 AM
Rainer
15,596
Jennifer Kladny
Premier Servicing Company, LLC

Great info!  As a loan officer, this is good information for others in my same profession to be aware of.  Thanks!   JENNIFER

May 16, 2008 09:38 AM
Rainmaker
723,762
Richard Weeks
Realtor, Associate Broker - Manager Business Development
Waller Group

The Texas Real Estate Commission has prohibited agent here from using escalation clauses.

October 23, 2013 05:16 AM
Anonymous
Post a Comment
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the magnifying-glass to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Ambassador
383,229

Pam Dent

Realtor - Charlottesville Virginia Homes and Horse Farms
Ask me a question
*
*
*
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the cloud to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Additional Information

Feedjit Live Blog Stats
free web page hit counter