Buying a Foreclosure or Short Sale
Getting your offer accepted
How the current market affects sales of foreclosures
Some people are under the opinion that it is easy to get a good deal on a home in Riverside or Corona with short sale or foreclosures (often referred to as distressed properties). But it isn’t that simple. The majority of homes for sale in Riverside and Corona are short sales with significantly fewer bank-owned (foreclosures) homes. The well-priced homes in good condition typically get multiple offers and are snatched up quickly. There is a lot of buyer competition for these homes.
Some buyers think that they can come in and offer quite a bit under the asking price but unless there is something really wrong with the house and/or it has been on the market for a long time, low offers aren’t usually considered. The banks know what they want to net in the sale and what the house is worth – for both foreclosures and short sales. If there are things wrong with the house, the list price usually reflects that.
How much should I offer?
Don’t make the mistake of making your offer too low. Have your Realtor search out the comparable sales before you decide how much to offer. Cash offers are hard to compete with – banks really like cash offers as they carry less risk than an offer where the buyer is getting a loan. But many distresses houses end up selling for over the list price.
Get pre-approved for the purchase
The bank will want to know that you can get a loan and complete the transaction. If there are multiple offers, the bank is going to choose the one that nets them the most, has the best chance of closing successfully and has the financing already in-place. You will need to work with your lender/loan officer prior to looking at houses to get pre-approved for your loan. A pre-approval letter must accompany your offer - as well as proof of funds that you will need for the down payment and closing costs. Getting pre-approved takes very little time and is a must. A pre-qualification is not the same thing.
