There’s no question that banks have gotten much smarter at selling their REO (real estate owned) properties. When they foreclose and take the property back, there’s a series of events that takes place before they can dispose of the asset. Banks don’t want to hold on to real estate; they want to be a bank and lend money and get depositors. However, over the last couple of years they have realized they were leaving a lot of money on the table and they’ve since changed their strategy. Banks tend to more slowly put the homes onto the market now so that they can control and keep inventory lower and demand high. They also are going in and making repairs to the homes, trying to attract an end-user who will more likely pay more for the property than an investor would. Banks are getting more and more in tune with the market and doing everything they can to get the best return possible.
I personally deal with this every day and even though the banks are getting tougher, there are a few tricks you can do to help you beat the banks and get the deal:
- Be patient. When dealing with these foreclosure mills that are processing thousands of foreclosures, it can be extremely frustrating. They tend to move at their own pace regardless of time frames and deadlines and even the closing date. They can take weeks to respond to your offer. Sometimes they move quickly and you’ll be surprised, but don’t be overwhelmed if it works the opposite way for you.
- Make a strong offer to begin with. Low-balling them does no good. The banks price these properties to move and coming in with a reasonable offer will greatly increase your chances of buying it. They have appraisals and comparables sales in front of them when they list these homes and they have a good feel for the market.
- Limit your contingencies. Shorten your days for inspection and waive financing contingencies if you can. You have a lot of competition right now as a buyer and whatever you can do within your comfort zone, you should. Just make sure that you don’t get yourself in too far that you could, for example, lose your deposit if you really needed to cancel the sale.
I am seeing bank-owned deals slowing down and more conventional sellers entering our market. But when they do come on they are usually good opportunities – don’t let them pass you by!
Gabe Mellein was voted a Top Real Estate Agent – Exceptional in Service and Overall Satisfaction by Gulfshore Life Magazine in 2012 and 2013. He is the broker of Gulf Pointe Properties, Inc and has over 9 years experience in the SW Florida Real Estate Market. He is a member of The Naples Area Board of Realtors, Bonita Springs – Estero Association of Realtors, Realtor Association of Greater Fort Myers and the Beach, The Florida Association of Realtors, The National Association of Realtors, and is nationally certified in Feng Shui for Real Estate. Need real estate help? Please contact Gabe at: 239.825.2234, Gabe@GulfPointeProperties.com or www.GulfPointeProperties.com