Here at East Texas Life Properties, we get a lot of questions about foreclosures. Being one of very few Fannie Mae approved agencies in Tyler, Tx, we also hear the common myths that surround the foreclosure process.
When considering the purchase of a foreclosed home, be aware of these common myths:
1 - You should submit a "lowball" offer because the banks want to get rid of the homes.
As we discussed in a previous blog post, banks and foreclosure companies have several reports indicating fair, market value for the property they are selling. Like a traditional seller, they are selling the property for market price. Submitting a low, unjustified offer just makes the negotiating process harder and decreases your chances of getting the property.
2 - Foreclosure banks should negotiate significantly.
Not necessarily. Many of the managers who have the authority to speak on behalf of the bank or foreclosure company have strict guidelines to accepting and countering offers. Each offer is unique and depends on the terms and conditions the buyer is requesting for the sale. It's best to treat the purchase of a foreclosure as a traditional purchase: the seller knows the market, understands the condition of the home, has set guidelines to adhere to, is represented by a real estate professional and consider their bottom line.
3 - The bank will perform repairs on the home after inspection.
This is not always the case. Sometimes a bank is approved to do a few minor repairs to the home before closing if it is mandatory for the loan. But, there are also some things they cannot do. Make sure you understand the condition of the property. A good real estate agent can help you see repair items that may cause a red flag for the type of loan you will get. Keep in mind, the banks are not required to make repairs.
4 - It's a slow process.
There are many moving parts to a foreclosure purchase transaction. But, slow is not always the case. From what we've have seen, the slowest part of the transaction is making sure all of the contract and addenda documents are correct. Agents that are not familiar with foreclosure transactions can slow down the process because they don't have as much exposure to how the contracts have to be written. No mistakes can be on the contracts, all information has to match from the offer, to contracts, to addendum, to amendments. When this is done correctly, it usually moves along as quickly as a traditional sale.
We are the East Texas Foreclosure Specialists. If you have any questions about the process or are interested in seeing a foreclosed home, give us call! We can show you any foreclosure on the market and our negotiation experts can help you get the home of your dreams!
- Jayna Williams, Managing Broker