Eight Tips for Submitting an Offer on a Foreclosed Property
1. Earnest money: Earnest money should be 1 percent of the purchase price or more, but not less than $1000.
2. Days or business days: The Idaho purchase and sale agreement refers to business days, not days, when calculating inspection period. If you submit the offer for ten days, I have to submit it to the bank as 14 days because they look at it as only days, not business days.
3. Highest and best offers: The bank doesn't put cash buyers in front of full priced offers. Highest and best means the highest offer. They don't care about cash or financed offers.
4. Closing dates: Don't try to set closing dates for the end of the month. End of month is the busiest time for asset managers. Your offer will look better if you select closing dates in the beginning or middle of the month.
5. Countering situation: If you are in a countering situation and your buyer is at the maximum of their affordability. Don't be afraid to counter with the same amount and state this is their highest and best. I've seen some people walk away without trying one more time. I've seen banks accept the same offer re-submitted with "highest and best" on the counter.
6. Asset managers do work weekends: Don't hold your offer until Monday thinking you have the weekend to wait. Someone could snipe it out from under you.
7. Offers need to be accompanied by proof of funds or pre-approval letter. Some banks require pre-qualification letters from their institution. It's not requiring that your buyer use that bank, but they do need to go through the motions of getting the pre-qualification. Sometimes, however, they'll get a better deal from that bank. They might provide a lower interest rate or pay closing costs.
8. Title companies: Banks don't want to use different title companies. They want to use the title company with whom they have a relationship because that title company is familiar with the process and/or linked into their online platform. I recommend you write "sellers choice" for title company. Otherwise, the bank may refuse to pay title insurance if they use the buyer's title company.
If you still have questions on how to submit an offer for a bank-owned property that stands out, or if you'd like to know more about the inventory of foreclosed properties in the area, please don't hesitate to ask in the comments or contact me directly.