by “Dave”…a reader that seems to have just scored a great home. Important detail he left out, and what I’m dying to know…did you use a Realtor?
As I mentioned before, there wasn’t much magic in my purchase. The house was listed on MLS like everything else but was disclosed as an REO. I had an RSS feed set up to track craigslist postings with the phrase “REO” or “bank owned”. (Real estate MLS search engines lack this keyword search capability..)
Once I saw this property show up, I attended open houses like everyone else. I think what scared most people away is the amount of deferred maintenance. 101 years old and not very well kept up. Needs a few big ticket items right off the bat ($75-100k), but I can afford to do these repairs and don’t mind the temporary inconvenience.
Lastly, I presented a very clean offer. I cannot stress how important this is when purchasing a trust sale or an REO. The seller is a bank. (Imagine a room full of dudes in suits in a boardroom, hundreds or thousands of miles away from the property.) They do not want to negotiate with you about the lead paint on the windowsill or the cracks in the plaster. They have probably never seen the property.
They also don’t want lots of contingencies. I waived inspection and pest reports. (I had my contractor inspect it anyway, but not write up a report. This was just for my peace of mind…) They won’t wait on you to sell your home, etc. Money talks, you know the rest of the saying.
We submitted an offer that was roughly $30k below asking (and the house was already listed for almost $300k below it’s previous selling price) but the offer was super, super-clean. There were four offers total. I’m guessing that I wasn’t the high bid, but I was the cleanest. Also had great credit and came pre-approved (harder to do in the current climate).
For those looking to help on property shark or foreclosures.com, I can’t help you. I’ve found those sites kinda useless. To buy at auction on the courthouse steps requires mega cash. Not possible for me, and most of those properties are in crap neighborhoods. There are books (I’ve read them) that tell you how to find people who are in trouble (recipients of NODs) but it’s a creepy notion to me that I should call or send a letter to a distressed borrower, offering to bail them out…
If you’re looking for a deal, I recommend setting up RSS feeds on craigslist and searching for NOD, REO, “short sale”, “pre foreclosure”, etc. If people are desperate to sell, they’ll typically advertise it. Good luck to all…
Construction starts in 2 weeks!
Thanks for the details, and thanks for sharing.