10 Tips For Selling Agents When Submitting An Offer On A Foreclosure
1. Make sure that there are no blanks left unfilled in your purchase agreement - Every issue in the purchase agreement should be addressed.
2. If the buyer is getting a mortgage you need a pre-approval letter from a bank or mortgage company which states what type of loan the buyer is getting and how much the buyer will be financing. Some banks/asset companies will require that you get a pre-approval letter from a certain lender. You do not have to use their lender, but if they say they require a pre-approval letter from a particular lender it is wise to get them what they want.
3 If the offer is cash you will need to provide proof of funds from the buyer's financial institution.
4. Certified funds for earnest money is helpful.
5. Timing is crucial. The sooner you submit the offer the better, but check the listing or with the listing agent for any timing limitations. If you are bidding on a property where you submit your offer on line, watch your timelines and submit as soon as you can. Usually it's the highest offer that gets the bid, but sometimes it's the 1st acceptable offer. The sooner a buyer writes an offer the less likely they will be to get into multiple offers.
6. Give the seller time to respond. Three - Five days is preferable. They may respond sooner, but if they don't, and you do not give them enough time, your offer will expire. Once it expires in the system you have to start over and resubmit. They might accept another offer while your offer is in the system as expired.
7. Usually the property is being sold "as-is." It's best not ask for repairs.
8. Keep in mind that anything you ask the seller to pay on the buyer's behalf reduces the seller's net proceeds. You can ask for the seller to pay for the buyer's closing cost when there is a mortgage involved, but sellers rarely pay prepaid items, such as insurance, taxes and mortgage escrow items.
9. Do not write any "weird stuff" into the offer. You cannot move in before you close. You cannot do repairs before you close. And the listing agent has no way to submit a two page (or even one page) explanation of why you are offering what you are offering.
10. Finally, if you do find yourself in a multiple offer situation and you are told to "make your best offer," then do just that. The property is worth what it is worth to your buyer. Explain to your buyer that if they would have gone $1000 higher, now is the time to do it. If they would have gone $10,000 higher, now is the time to do it. In our market over 25% of the sales are foreclosures, but less than 10% of the listings are foreclosures. There are a lot of multiple offers. The best deals almost always go into a multiple situation. The sooner, the higher and the more complete your offer is, the more likely you will win in a multiple.