My tips for buying in this market
* Be Patient: There are many foreclosures to buy and another wave is expected this summer now that Fannie Mae, Freddie Mac, FHA and other banks have lifted their moratoriums.
* Pick the right Realtor: There are a lot of great agents out there, but there are a lot of agents who just fire off emails of listings, with no knowledge of the real estate they are trying to sell. In order to buy real estate today, you and you’re agent need to work as a team, and be able to identify all the properties coming back from the banks in your area. Is you’re agent subscribing to tools like Realty Trac, Redloc and Foreclosure radar? All of these services provide information on pre-foreclosures and can give you the edge over other buyers as to when the bank has completed its foreclosure process and owns the property. Is the agent representing you in contact with the banks taking back these properties? Does your agent have relationships with other realtors getting the listings? These strategies will could help you in getting the property of you’re dreams.
* Get pre-qualified: Find a reputable mortgage broker, or bank that is making home loans. This is extremely important and will make your offer stronger. Get a discount if you can buy all cash. All cash offers move to the top of the pile since banks prefer all cash buyers to those higher prices with loan contingencies.
* Get familiar with the property: Many homes for sale today are sitting empty. Go to the open houses. Sometimes there is no open house. If you can’t get into the house then walk around it and get a feeling as the condition of the property. I look in the windows to see what the condition of the kitchen, living areas, and bedrooms. Sometimes I will shorten my inspection period to 3 days, which often trumps out my competition who are looking a longer period. Minimize contingencies. Most banks automatically give you 10 days anyway.
* Ask you realtor to pull all the sold sales comparables, and a list of on-market properties so that you can position your offer properly. In some cases, the banks are listing the properties below the market value to create more interest and a bidding war.
* Keep an eye out for those deals that fall out of escrow: A solid realtor is tracking every deal he or she missed for their client and should be ready to pounce on the deal when it falls out of escrow. I have found some of my best deals this way. Often, a bank is willing to take less than the property was tied up and in escrow for in return for an quick all-cash transaction. If your loan is lined up and your bank understands the circumstances they may be willing to close the transaction quickly.
So, to summarize, there are a lot of deals in this marketplace and I think there will continue to be over the next year or longer.
Be smart, patient, choose a realtor you work well with, get qualified by a bank early on and you will find that dream home or investment.
