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FREE LIST OF FORECLOSURES-Looking to buy a foreclosure? There are currently only about 110 bank owned homes on the market. The inventory has been substantially depleted in the last few months. Call me today to get your free list of Cape Coral foreclosures
How much longer will you wait to take advantage of the market? The opportunities are dwindling daily as depicted on the chart above. We are almost back to ground zero. Less than 400 filings occured in March. That is for all of Lee County properties of all price levels and catagories. Now is the time, but you must work with an agent that knows the market.
The opportunity most investors and first time buyers have been waiting for is still here but it won't be that way for long. Prices are unrealistically low. EG: if it costs $100 a foot to build a home on your lot, you can now find homes already built and maybe just a few years old for $50-$80 a square foot. Whether we will see another cycle of such deeply discounted properties is anyones guess. But the last time seems to have been the Great Depression, so I am guessing it may be a while.
Buying bank owned (REO) or foreclosed properties-While many opportunities exist in REO (bank-owned properties) the inventory levels have shrunk to less than 335 homes in the Cape Coral area. That is less than 13% of the inventory. The foreclosure inventory is dwindlingThis inventory convers prices from $35,000 to $657,000 as of todays writing. Many of the homes are in distress and will need work. Sometimes very little work and sometimes tens of thusands of dollars.
There is a lot of information out there about the current market, some good and some bad. Often the information offered is for sale, with the promise that you can make a lot of money with little effort once you know “the secret formula”. The fact is that there are no secrets, and to make money does require effort. There is a technique to working with Bank Owned properties and you must work with a Realtor that trully knows what they are doing.
Buying Shortsale Properties-. A short sale, to put it simply, is a sale that occurs when all parties agree to the sale of a house and the lender or in many cases lenders (if there is a second mortgage on the property) agrees to accept a pay-off amount that is less than the actual loan amount on the property.
Short sales can be very tedius and time. This requires alot of patience from both Realtor and buyer. Many Realtors stay away from them, much to the demise of their buyers. Because the Realtor does not want to "work that hard" they steer buyers to REOS (bank owned) which are easier or at least quicker to negotiate.
Whether you are working with an REO or a short-dale, be prepared for at least some frustration and grief.
However, my experience has been that banks are now "getting it" and because of that they are speeding up the process. If a buyer chooses to avoid all short sales they will find inventory very limited and frankly often very defective (yucky neighborhoods, ugly house, ugly floorplan, missing ACs, lots of work needed, etc... In general be prepared to spend p to four months from beginning to end of the short sale buying process.
Ready to make an offer?
Typically the REO department of a bank will use a listing agent to get their REO properties listed on the local MLS.
- Before making your offer, get with your Realtor to find out as much as you can about the property and that particular banks method of accepting offers. Trust me they are all different.
- Get with a Realtor that knows what they are doing. I cannot tell you the crazy things I have seen from inexperienced Realtors.
- Get prequlified and know exactly what amount you qualify for.
- Banks always sell REO properties “as is” with a right to inspect, you’ll want to be sure and include an inspection contingency in your offer that gives you time to check for hidden damage and terminate the offer if you find it.
- As with making any offer on real estate, you want to make your offer as attractive as possible as there are often multiple offers.
- You must provide proof of your ability to close by either a "proof of funds" bank statement or if you are financing, a pre-approval letter from a lender.
- After you’ve made your offer, upi may have to wait up to a week or so to get a response. Often you can expect the bank to make a counter offer. Then it will be up to you to decide whether to accept their counter, or offer a counter to the counter offer. Realize, you’ll be dealing with a process that probably involves multiple people at the bank, and they don’t work evenings or weekends. It’s not unusual for the process of offers and counter offers to take days or even weeks.
- Know what you are looking for-narrow down your search and stay focused
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Recognize pricing-sometimes you will come in low and other times you will face a multiple offer situation and will have to "outbid the competion" Either way you will win, if you know your pricing and are comfortable with the price you are offering. It is not the percentage of sales price that matters but whether the property is worth what you are paying.
What price do I offer?
This is where doing your homework will really pay off? Working with an experienced Realtor is a must.
- Currently in the Cape Coral market bank owned properties sell in as little as 1 day.
- They may have over 10 offers on each property.
- They may come back with highest and best to you
- Selling price might be below, at, above or WAY ABOVE asking price, depending on the level interest in the property
- Expect to be asked to close quickly or no longer than 30 days out. Once a deal is struck, the bank wants to get it closed and off their books.
I deal with REOS and short sales all the time. Call me today with all your questions.
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