Buying a foreclosed home is not as easy as you may think: First, off the now bank-owned property is going out to a listing realtor for a price. Most of the time this price is way low. And if you were to be the only one to look at it and make an offer you may just get it. But that’s not how it works. I’ve made more offers on houses I know what to do with. Then I got a little smarter. I started offering even more than the listed price to even then not get the deal.
So what was happening in most cases I was being outbid by as much as 100%. So where I thought a 100k was OK someone with more money bid 200k for the same house. I mean a no-brainier that the bank would take the highest CASH offer. So keep that in mind if you really want that house. Someone wants it more than you.
CASH: Now just in case you think you can go and apply for a mortgage think again. At least here in New York, you have to prove you have that cash in the bank, and in most cases before the realtor will even submit your offer.
What realtor to use: Over the years of being a builder I’ve made friends with a few realtors. So when I was ready with cash in hand I made a few calls. And now the race was on to find me a new home. A big tip is to find a realtor that uses email a lot and very well. Why, because in the mornings when they are looking at new listings they can shoot you an email listing and that would be a lot faster than someone that will just make a note to call you eight hours later. Trust me on this one.
My House: Now here’s my little story. My house was listed in the system at 6:45 am, I received an email from my realtor at 7:15 am. I knew the area and thought it was worth looking at right away. I was at the house by 8:00 am. And to my surprise so were a lot of other people. Dam I said to myself. I’ll never get this house. The bank had this house listed for 100K even. This was a five-year-old 3000k five-bedroom house that could sell in a good market for 500k and in good shape. But let me tell you, it wasn’t. The previous owners did one heck of a job on this house. But still the same was well worth the asking price. Now 100k into most of us is just not sitting in my back pocket. But with luck I been saving this for a long time and I just had it. But I could not go any higher, not even a dime.
So of course, I made the full offer and a week later I find out that I lost, the bank took the highest offer and it was not me. Then about two weeks later I get a call from my realtor at 3:20 pm. He tells me the other guy had issues of some kind and will not be buying this house. You are next in line, do you still want it. Well, I couldn’t say YES any faster. Within 90 minutes my lawyer had the contracts from the seller. I went to see my lawyer the next morning at 9:00 am to give him a bank check for the required deposit and sign away. Weeks later I was broke LOL. but what a nice house I have.
Sure it needs some work. But over a little time, it will all be done and the way I want it. But here’s the kicker. When it’s done I won’t have a mortgage.