Multiple Offers On Foreclosure Properties
In today's challenging Phoenix, Mesa, Gilbert market and in many markets around the country, there are many bank-owned, or foreclosure, properties. These are properties that have gone through the foreclosure process and been taken back by the banks.
contrary to popular belief the banks and lenders DON'T like taking back properties. They want to "loan" not "own." When the borrower doesn't pay their mortgage, the bank has no choice but to foreclose and take back the property. They have to do this even though it's not good for banks and other lenders to have real estate assets on their books. Because the banking regulators and government agencies frown upon this the banks want to get these real estate assets off their books as soon as they can.
So what do the banks do with these pieces of real estate, mostly single-family homes? They do the exact same thing anyone who wants to sell real estate quickly does: they list the property with a Realtor.
Because they want to get this real estate sold as soon as possible, banks usually price the homes at a low price to attract buyers and get the home sold fast. Many times buyers think they can "steal" these homes and often make ridiculously-low offers hoping that maybe they'll get lucky. This does happen occasionally, but it's usually a waste of time. Banks aren't dumb. They won't sell a home that's worth $200,000, for example, for $100,000 when they can get $150,000. In today's market, a lot of the nicer foreclosures, and the ones priced low to begin with, sell at or above the asking price.
And so we refer back to the title of this article. Many foreclosures in good shape and priced well at the start, actually receive multiple offers and sometimes selling above the asking price. This foreclosure market seems in many ways similar to the seller's market we saw from 2002 to 2005.
With interest rates back down, lots of homes to choose from, and great prices, buyers are finally coming back into the market and buying homes - both to live in and to invest in.
Buyers who think they can make low-ball offers are getting a rude-awakening when they get blown out of the process right away. Even though many real estate agents are counseling their buyers not to low-ball the well-priced and "in good shape" foreclosures, many buyers still try and end up getting rejected.
To effectively compete in today's foreclosure market, seek advice from a competent, experienced Realtor and make offers appropriate for the situation in which you're in. If it's a recently-listed foreclosure that is well-priced, then a stronger, smarter offer is more likely going to get you the property than will a low-ball, ridiculous offer. Even paying full asking price for a foreclosure can still be a phenomenal bargain.
There deffinately are situations where it would be appropriate to make low-ball offers, especially when a home may need a lot of work and it has been on the market for a while. The banks may be more motivated to sell these homes at a lower price. Again, seek counsel from a Realtor experienced in foreclosure properties.
By the way, if you'd like to discuss how you can take advantage of all the great opportunities in this market give us a call at (480) 430-9761or click here and let's talk.