The title of this article may seem to be contradictory in those few words. We’re talking about foreclosure properties, so we want to see if there is a way to cut a better deal if we’re right there when a property is just about to be put on the block or listed. We also want to see if better deals are available if we simply wait for the property to languish on the market.
Actually, it can work both ways, which one depending on the individual property and situation. The biggest factor in which approach to take is usually competition. If foreclosure inventories are very high and there are plenty from which to choose, you can usually just wait out the situation. The longer the property sits on the market, the more amenable the bank may be in giving you a deal to take it off their books.
One investor makes a super-deep discounted offer early in the listing, and it is almost always ignored. However, as the property sits on the market, the investor watches for price reductions, making another deep discount offer after each reduction. He simply waits out the bank, and they clearly understand that he’s not going to pay their asking price, even when they reduce it. At some point, he gets them to take his offer on one out of every 10 or so deals.
If the market is more competitive and you can’t count on the properties sitting on the market, then the early bird approach may be better. Cultivate relationships with real estate agents specializing in listing foreclosures. Have them alert you to opportunities before they’re advertised. Make your offer before they’re listed and at a reasonable discount to the list price. The bank will weigh the costs to board up and hold the property against giving you a good deal.
Star of Spike TV’s FLIP MEN
RealtyTrac Education Partner
#1 Real Estate Coach and Mentor Worldwide