OfflineWhether you’re a retail home buyer looking for a foreclosure deal or an investor who hasn’t yet negotiated with a lender on a foreclosure, you need to know that it’s a whole different ball game from negotiating with a normal seller.
People who own homes have a certain amount of emotion invested in their home. They may even set an unrealistic list price because they’re not fully informed by their real estate agent about the current market value of their home. In situations like these, it’s not difficult to get into a situation where your offer in some way offends the seller and they tell you to take a hike. Emotion and business rarely coexist well.
It’s a whole new ball game when the home is a foreclosure and you’re negotiating with the bank/lender as the buyer. There is NO emotion involved, and you’re frequently negotiation with not one person but a group with a bunch of bureaucratic procedure involved. In the foreclosure and listing for sale process, the bank has used either an appraiser or a real estate broker to give them a current market value for the property. What we need to know is that this is just an estimate of value.
There are a lot of market forces at work, and as a buyer we’re not aware of all of the bank’s motivations. This is why cutting a deal on a foreclosure can begin with a really low offer. This process will not work if you’ve fallen in love with the home and simply must have it. However, if you can walk away from a deal, a really low first offer isn’t going to make the seller mad. It’s a bank after all! They’ll at worst tell you to go away.
Go into a foreclosure purchase negotiation with the knowledge that you’re offering the bank a solution to their problem, a non-performing asset. You may be really surprised at the result.Clark
Concerning a foreclosure, how can I benefit from a foreclosure when im the matchmaker? I cant do an assignment or a double close since im dealing with the bank. Would I be able to bird dog it? If I bird dog it, with the agreement to have the buyer use my realtor (since it was my realtor who found it) won't I risk that the buyer develop a relationship with my realtor and then use him directly?