I promise you that this will be the only industry related post that I will do…. I have a friend who recently decided to put in an offer on a great property out on an acreage, unfortunately because her realtor didn’t know a thing about foreclosures or short sale she was out bid. This is just a little piece of friendly advice for those out there wanting to get on those “great deals” on properties, since I do have some knowledge on the subject:

• Come in with a strong offer. The property you want is already a “great deal”, usually listed at 50% more below the value of the home. Don’t expect to low ball and submit an offer below the asking price, because banks tend to find this insulting. My gf put an offer $10,000 below the listing price and asked them to pay for closing costs. She lost the property of her dreams to a better and stronger offer.

• Be prepared to clean up the mess. With foreclosures and short sales, the previous owner’s thoughts are usually “we need to get out of dodge and quickly”. So the property is usually left in disarray, don’t be surprised if the house needs a little tlc after closing. What you see is usually what you get. If the drywall has fallen off the wall, that crumbly mess will still be there when you move in.

• Don’t expect the bank to give you incentives to purchase. Recently a client submitted a counter offer asking the bank to give a credit for tuckpointing and to replace non-working appliances. The attorney for the bank’s reply was “are you insane?” Again, you are already getting the property for a bargain, why ask for extra $500 credit to replace appliances when you are basically getting thousands of dollars in credits.
  

• Expect to play the waiting game. In today’s market, especially in Chicago, mortgage companies are dealing with hundreds to thousands of short sale applications and foreclosures. No matter how many times you have your agent call the bank, you are just a number in line. Patience is a virtue and you should develop it when waiting for the bank to accept your offer.

• Finally, hire a good inspector. This is key because you need to know what’s going on with the property that you just made an offer on. Many times the people who go into foreclosure do not have the money to upkeep their property and have let certain things basically go to crap, ie. roofing, electrical work, plumbing, foundation issues. A really good inspector can be a wealth of information and help you know what you are getting into and also if you can afford the repairs. Best part, there are no surprises when you move in.

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