How to pull off a foreclosure or short sale

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Are you in the market for a foreclosure or a short sale? In essence, both are properties that are generally far cheaper than originally priced.

Regardless of price, you have to have proper financing to buy.

“A bank is not going to look at an offer that does not come with proof of funds. If it’s a cash offer, they’ll at least need a statement showing proof or a preapproval letter from a mortgage company,” said Brett Young, a realtor with Remax Ability Plus.

Our second tip to get you that low-priced home is to act fast!

“We are seeing a shortage of inventory across the board and not only on foreclosures. If you are out looking and you find a property that you like and you want to make an offer on it, you better move quickly, or it’s going to be gone,” said realtor Jenn Marlow with Remax Ability Plus.

The third tip—don’t get greedy.

“It depends on the property of course. If the property was recently on the market, and in decent shape, low-ball offers are not going to work,” Young said. “The banks are already pricing them appropriately knowing the home needs some work.”

The key phrase comes from Young: “It depends on the property.”

If it’s badly rundown, the bank may take a lot less than the listing price, because they know it won’t sell for anywhere near the listing price. Another way to improve your chances of getting a good deal is to make what’s called a “clean offer.”

“Banks aren’t usually going to want to pay the extra closing cost that some sellers will help you with. You probably shouldn’t ask for a home warranty either,” Young said. “People also won’t get extra surveys and all the extra fluff items that can be added to a normal home sale.”

The takeaway: bid accordingly and ask a professional for help in assessing a property’s worth. Make sure you know what you’re up against.

“I would say, you always want to call the other party and find out if you’re competing. If you’re competing, you’re going to structure your offer completely different, whether or not you’re going to come in strong with your initial offer, or you’re going to try to come in low, knowing that you’re going to ease up a little bit,” Marlow said.

And with a little luck, and help, you’ll get the property you want and for a good price!