Did you know that thousands of properties are owned by banks today? Each day new homes are added to their inventory lists due to properties that have been foreclosed. Investors understand that no bank wants to own homes. That is not the scope of their business. They want to earn money by lending it to others wishing to own homes, buy and hold properties, enter the real estate investing market, or buy and sell real estate.
While banks do not wish to be in the real estate business, they don’t want to give properties away either. Wise investors can take advantage of the large inventory of bank held properties and so can you use the following five tips.
Since the large majority of bank held properties are purchased with cash, it is important that you update your proof of funds before entering into a transaction with them. To get a jump on the competition, consider including you updated bank statement with any offer. This extra step will let them know that you are ready and willing to move the purchase forward. The more recent your bank statement update is the better.
Although bank owned properties are typically offered with minimum earnest money deposit amounts, it is not in your best interest to submit that amount with your offer to buy.
Banks know that the more skin in the game you have the less likely it is that you will back out of the purchase. For that reason, they are more likely to accept an offer with EMD that goes above and beyond what is expected since this demonstrates that you have resources to meet all kinds of different needs Multi family or otherwise.
The easier you make it for the bank to accept your offer, the greater chance you have that they will. Cash buyers will always have a better chance than buyers depending on financing to buy and sell real estate. The only contingency you should include in your offer should be concerning the inspection and every signature and initial line should be filled in properly and legibly.
Motivated sellers, such as banks, appreciate a fast closing, so be sure you are prepared to accommodate that.
Real estate investing involves a number of steps. One of those steps is the counteroffer which might indicate that there are multiple offers on the table, or that the bank must satisfy a specific price offer in order not to lose on their investment.
If you get that counteroffer and still want the property, be sure to make your counteroffer quickly, within hours not days or someone else may beat you to it. If you no longer wish to pursue the purchase after getting a counteroffer, be considerate and let the bank know of this decision as well.
Rental properties are often FSBO and intended to give the landlord relief even if the property is not currently owned by a bank. If you are looking for something like this we can find it for you.