This is the next article in my series on buying distressed or foreclosed properties in Dayton, Ohio. My last article discussed how buying a property that is owned by HUD is slightly different than a property owned by another institution. In this article, I will discuss the process of making an offer on a non HUD foreclosure.
It is important to understand the process of making an offer on a distressed property
The process of making an offer on a foreclosure, from the buyer’s standpoint, is not significantly different than making an offer on any other property. However, each institution will have their own process. For example, properties that are part of Fannie Mae’s HomePath program, have additional paperwork that must be filled out and submitted with a standard contract. The same is true with Freddie Mac Home Steps homes. Other banking institutions may utilize an online system that will require your Realtor to set up a username and password, and input the basic information of your offer along with a proof of funds. From the buyer’s standpoint, these differences are not outwardly obvious, but it is important that your agent understands the instructions required to submit the offer. Once an offer is submitted, there are some aspects to a foreclosure that a buyer can reasonably expect, regardless of the institution selling the distressed property.
One, it is likely the offer will not get a quick answer. A foreclosure property may take up to two weeks (and in some cases, more) to reply to an offer. The bank does not have a great interest in rewarding a buyer who makes their offer ‘first’; rather the bank wants to make as much money from the sale as possible, and is happy to wait for multiple bids to come in. Two, as discussed in previous articles, inspections will be allowed, but it is unlikely that utilities will be turned on. All foreclosures are going to be sold in ‘as is,’ condition, and it is important that the buyer have the knowledge, or hire someone who has the appropriate skill, to accurately assess the cost of repairs. Three, loans may be accepted, but cash is king on foreclosures. The bank will want to accept the offer that both nets them the most money, and closes in the most efficient amount of time. And finally, the bank will likely require that a certain title company is used and will have additional paperwork and addendums that the buyer will be required to sign.
Choosing a Dayton area realtor to handle a foreclosure
When it comes to choosing a Realtor to represent a buyer in a foreclosure transaction, I would recommend establishing a relationship with an independent buyer’s agent who has experience in the various types of foreclosures. In general, I do not recommend calling the listing agent directly to make an offer. The reason being, most listing agents who sell foreclosure properties deal with a high volume. When a new property is listed, they might get dozens of phone calls and emails regarding the property. Many of these inquiries are not serious but take up an agent’s time and attention. In the meantime, they are often dealing with several other deals and properties. A well-meaning buyer who calls the listing agent directly may run the risk of getting lost in the shuffle of inquiries. I recommend establishing a relationship with an experienced buyer’s agent prior to finding a target property. You should discuss your goals with the agent, explain any experience you have with foreclosures, and provide a proof of funds so that they know you are serious. When you identify a property you are interested in, you will have a relationship with a Realtor who can schedule a viewing of the property and assist with putting in your offer. Many buyer’s agents will be much more receptive to a buyer who proves that they are serious and who is looking to establish a long-term relationship with an agent.
If you are considering buying a Dayton area foreclosure then contact me today to speak with a realtor. I work to provide the highest levels of service and I look forward to assisting you. I also service the areas of Beavercreek, Centerville, Cincinnati, Clayton, Englewood, Oakwood, Fairborn, Harrison Township, Huber Heights, Kettering, Miami Township, Miamisburg, Riverside, Springboro, Trotwood, Vandalia, Washington Township, West Carrollton, and Xenia.
Note: Nothing in this article, or on this website should be construed as investment or financial advice. The opinions shared on this website are the personal, and not professional, opinion of the author and are not associated with Keller Williams Advantage. Any investment decisions should be made after consulting with a certified financial/investment professional.