So you think you are ready to step into a foreclosed property in Atlanta, GA? If you have the intention of buying a bank owned property, take note that the process may take longer than you can wait. If you intend to move into that property, check out my 5 tips for buying a foreclosed property:
1) Get Pre-Qualified for a loan
When you write an offer on a foreclosed property the receiving broker will forward your offer to the lender who holds the property. The lender will in many cases have multiple offers on the same property so your offer needs to shine. If you have cash, send a bank statement – If you need financing, please be pre-qualified not just pre-approved. Many times the best price does not win but the best chance of a successful closing will!
2) Hire an Agent Who Can Really Help You
As foreclosures continue to rise, the backlog of REO files at the lender continues to grow. As a result, the process of buying a foreclosure can take weeks if not months to advance to a stage where the potential buyer and seller have something that symbolizes an agreement. Unresponsiveness from the bank will try the patience of a buyer and will try the patience of the agent responsible for writing the offer. Understand that the Selling Agent earns a living from successful offers and in order for the process to work in your favor, don’t get greedy with trying to save the commission for yourself. As a matter of fact, I know I work harder and longer for a guaranteed thing. Hint: Sign a Buyer Brokerage agreement with your broker. They will hang in there longer and go the extra mile for you if they know they will get paid at the end of the journey.
3) Understand the NEW Real Estate Contract
In Georgia, the GAR (Georgia Association of Realtors) has completed new revisions to many of the contracts and addendums for 2008. There are a variety of changes and items missing from the standard sales contract. In order to cover your assets, make sure the AGENT YOU HIRED has addendums and exhibits to cover financing, appraisal, and inspection contingencies. A basic GAR sales contract says that you can complete the sale for cash.
4) Be Able To Buy Without Having to Sell
If you have to sell your home, buying a foreclosed property may remain a dream for the near future. Contingencies to sell property are almost never accepted. If your home is currently under contract with a firm closing date, be prepared for short term housing as a predictable negotiation and closing on an REO is — well — unpredictable.
5) Make Your Best Offer and Stick with It
After you make your offer you will most likely receive a notice that the lender may have multiple offers on the property. While it may or not be true but if you raise your offer price now, the chance of getting a DEAL slowly dwindles. When buying a foreclosure, make your best offer up front considering after repaired value, cost of repairs, etc. Now is the time for a poker face. Your desire to purchase this property must be less than the banks desire to sell it. Do not allow the listing agent or the bank to know how much you really want the home.
Mike Pennington is a full-time licensed Realtor with Maxsell Real Estate in Woodstock, GA
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