Foreclosures: What you should know BEFORE you make an offer, Part 1
November 12th, 2007categories: Anatomy of a Chico CA Real Estate Transaction, Chico Buyers, Chico CA Foreclosure Listings
This is part 1 in a series of helpful hints to purchasing foreclosures in Chico, CA.
“Foreclosure” sees to be the new buzzword around Chico, CA these days. Everyone wants to score that awesome Chico CA real estate deal, and people are looking to the foreclosures in Chico to make it happen. In truth, most people are actually wanting “REO” property. In other words… the bank now holds the title.
The process of purchasing an REO property can be significantly different than your average residential purchase. Not always, of course, but often enough that you should know ahead of time what you might run into.
Before offering on a Chico, CA REO property, you should know:
1. Not all REO’s are phenomenal deals!
Just because the listing agent labels it “foreclosure!” doesn’t mean that it is a steal. I work with a least one bank that takes the appraisal price and ups it by 5% to arrive at the asking price. Make sure that you are working with a competent Chico Realtor who can help you ascertain whether or not the property is priced competitively.
2 . The bank has no emotional ties to the property.
Unlike a typical homeowner, the bank is emotionally detached during the negotiating process- it’s completely impersonal. Truly, your offer is just one of many files sitting in a pile on somebody’s desk. The strategies that might help you score in a traditional transaction are unlikely to work with a bank employee located in Texas. They have a specific set of rules and time-lines to follow, and little else matters to them.
3. The bank operates on their schedule, not yours.
“Time is of the essence” in a typical transaction. If, as a buyer, you allow the seller 3 days to respond to your offer, they will usually respond as quickly as possible in order to facilitate the transaction. A bank may respond in an hour, or it make take several weeks to get an answer! Don’t make the mistake of thinking the bank isn’t considering your offer- sometimes the contract has to be approved by a series of 5 or 6 people at the company before you get the good news. Conversely, I’ve found that once an offer is approved, the bank will steamroll over anybody or anything that gets in the way of closing the deal on time. Usually, they want to close within the same month the contract is approved!
Coming soon! What you should know BEFORE you make an offer, Part 2.
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Have specific questions on the foreclosure process? I’m glad to help, whether you are a seller facing foreclosure, or a buyer looking to purchase. Give me a call! 530-864-5407.
