Unless you plan to pay cash, you will need a recent preapproval letter from a lender. The letter will describe how much money you can borrow based on the lenders assessment of your credit score and income.
Usually buyers want to find the house first and then work out the financing. The problem with this is the really good deals go quick and the buyer probably won’t have time to work out the financing.
First time buyers often make the mistake of assuming the bank selling the home will also finance the mortgage as part of the deal. Don’t expect to get financing from the bank that foreclosed the property. Foreclosure and selling foreclosed properties are totally separate transactions and banks view it that way. The people in the banks real estate owned department are not loan officers, they are in the business of getting rid of bad assets. The best advice is get the best mortgage rate in your area before making an offer.
There’s no rule of thumb on what the bank’s bottom line is on price. Just as any other real estate purchase, you have to look at recent sales prices of comparable properties. Sometimes the bank’s price homes really low and they will have multiple offers over the list price within hours. Other times the list price is too high but you can make a lower offer based on recent sales of comparable properties.
Remember that foreclosed properties are sold “as is”. You should not expect a discount from the list price to compensate for repairs. The bank’s will be looking at the same “comps” and they were sold “as is”.
When contemplating an offer, buyer’s should know the absortion rate for their product class in their area. That is how quickly are comparable houses selling. A priced right house in a desirable community might sell within hours while other properties might sit on the market for weeks or months. It all depends on market conditions.
If houses in your product class are selling quickly, the best advice to acquire a bank owned property is to make your highest and best offer. Many buyer’s become upset because they lost a property at a price lower than they could have offered.
It all sounds daunting. But at least you don’t have to wait for the owner to move out before you can move in.
Good house hunting!
Tags: vero beach foreclosed homes, vero beach properties, vero beach real estate