Multiple Offers on Foreclosure and REO properties

At least once a week, we get asked how the market is doing. We'll if you are bidding on a Foreclosure or a short sale at the moment you would think it's as hot as ever.
Twice in the past 12 days we have been working for buyers who are putting offers in on Foreclosed properties that have multiple offers. Four offers in 2 days on one property and 3 offers over a week time frame on another. About one in five homes sold over the past few months in Jacksonville were either bank owned or pre-foreclosure properties. Let's say a good 40% of those had multiple offers. So who are the people that are getting the properties and how are they doing it.

The buyers of these properties don't hesitate, waiting a week or so to think about it, generally is not a good idea when dealing with bank owned properties. Almost more important to the bank than the bottom line, is how long the property is on their books. The quicker they can move the property the happier they are.

Having some money (or all the money) Banks do not want to pay your closing costs, they don't want to make repairs, they don't even want to pay for some of their closing costs (sometimes they are not allowed to ie: survey & doc stamps, depending on the program) Banks will look harder at a lower offer if it's a cash deal rather than a offer that is contingent upon financing, again b/c if the buyers financing falls through, they are putting the property back on the market.

If there are multiple offers and you are the lowest, generally your offer will just be rejected, no counter, no apologies. Just rejected. If you know there are multiple offers on the table you need to be in the ball park of the price range, and limit any nonsense in the offer. This is the biggest misconception out there, that if you make an offer they have to counter back. Not true, in a multiple offer situation you should put your highest and best offer out there if you want the property.

Now this advice is for those buyers looking for their home not simply an investment. As an sole investor, there are many other deals out there, and will be more tomorrow, but if you are looking for yourself, generally you are already getting a good deal by purchasing a foreclosed property rather than a simple resale or new home. (Generally 10-20% below market value.) Bottom line on this...
Be ready to make the offer (pre-approved, have $1,000 for a binder, have a buyers agent)
Have money ( have your closing costs saved and money to make repairs in the bank)
Make the best offer you feel comfortable with(making a low offer rarely works, and almost never works in a multiple offer situation w. a bank)

If you would like to receive updated lists of current foreclosures and short sales in Jacksonville, go to homes-jacksonville.com and click on contact us
(let us know what you are looking for and we will e-mail you the results)