I wanted to talk about writing an offer that will get accepted. There are 3 items that make your offer look serious and they are:
• Verification of funds for the down payment
• Earnest Money Deposit This should be a minimum of 1% but the more the better
• Pre-approval letter from your lender
To verify funds you need a current bank statement that has you name and the amount in your account to cover the down payment. You can black out the account number for your protection but it must have you name and the amount of funds.
The earnest money deposit check will need to be set to escrow 3 days after the offer is accepted by the seller. It must be at least 1% of the purchase price but if you increase that amount it can make the offer look more serious. This comes off the balance owed on the purchase toward the end of escrow.
The pre-approval from your lender just verifies you will be able to get the loan.
These items, submitted with the offer, please the listing agent and the seller. It shows you are a serious, organized buyer with the ability to close escrow on time.
Let’s talk a bit about pricing. Many times buyers ask me what I think they can get a home for. If it’s a cash offer, and you are willing to close in 2 weeks, you might want to bid 10% under the list price.
Some people think that the best deals are REO’s (Bank Owned Foreclosures) and Short Sales (owner has defaulted on their mortgage and the home is in the pre-foreclosure stage). I think the best deals are realistic owners (traditional sales with owners who understand what their home is worth).
The foreclosures and short sales are driving the market down. That’s right when one sells in your home for $50,000 less than the market value the next comps will include that pricing, driving the market down. Now all the homes in the area seem to be worth less money. Traditional owners must take these numbers into consideration before they list their home.
If you want your home to sell quickly, you price it right. That is the #1 thing you can do to insure a speedy sale. The longer a home stays on the market, the more concerned potential buyers become. “Why has it been on the market for 112 days?” Smart sellers listen to their listing agents and price their home fairly.
Call me with any questions at 858-717-0070
Sunday, October 23, 2011
Thursday, October 6, 2011
Courthouse Property Auction
I recently attended an auction on the courthouse steps. It was very interesting. I wanted to observe this step in the foreclosure process. Now I have a more complete picture of the foreclosure process.
1. Home owner defaults on mortgage; lender sends owner a notice of default.
2. If the payments are not reconciled bringing note current the courts will order the trustee sale.
3. If no one buys the home on the courthouse steps, it becomes a foreclosure returning to the bank.
4. The bank is the owner and will attempt to sell the property as a REO.
I arrived at 220 W Broadway at 10am. There was a crowd of about 20 people gathered around the front right side of the building. Many had their clipboards with a list of the properties and some had their blue tooth in so they could communicate with whoever was helping make the decisions. Some of the bidders where there to buy a specific property, the experienced ones had done their research and were ready to bid.
At 10:20am the auctioneer comes out and gives everyone directions about where to sit, keep the doors clear and stay on the right side in sort of a huddle around him. He makes sure everyone is qualified, has a cashier’s check up to the amount they are willing to spend. If they don’t use the total amount of the cashier’s check, it is refunded to them at the end of the auction. The auctioneer then goes down a list of withdrawn or postponed properties.
Finally the bidding begins! He begins by describing the property with the address and some numbers including the county assessment number; then a disclaimer about how there are no guarantees as to the condition of the property and how it is being sold as is.
The bidding starts with the banks minimum. That is the price the bank has decided it is willing to take. Sometimes that price was close to the balance on the defaulted mortgage and other times it was less than half.
The auctioneer calls out the opening price and the first bidder can go a penny over that. If no one else bids they win that property for that exact price. If others bid it goes up in increments of $100. If there are a lot of bidders the auctioneer might go up $500.00 to weed out some of the bidders. Highest bid wins the property.
It is very important the buyers do as much as they can to inspect the property and its records. They should be sure there are no liens against the property. Do a drive by and try to physically inspect the property as much as possible. If it is vacant they can try to peek in the windows.
I really wanted to see if this was really a good option to purchase San Diego Real Estate. In conclusion I found there were some excellent deals. If you can do enough research to ensure you are getting a good deal, have the cash sitting in an account somewhere, and factor in costs of repair, this could be a viable option.
1. Home owner defaults on mortgage; lender sends owner a notice of default.
2. If the payments are not reconciled bringing note current the courts will order the trustee sale.
3. If no one buys the home on the courthouse steps, it becomes a foreclosure returning to the bank.
4. The bank is the owner and will attempt to sell the property as a REO.
I arrived at 220 W Broadway at 10am. There was a crowd of about 20 people gathered around the front right side of the building. Many had their clipboards with a list of the properties and some had their blue tooth in so they could communicate with whoever was helping make the decisions. Some of the bidders where there to buy a specific property, the experienced ones had done their research and were ready to bid.
At 10:20am the auctioneer comes out and gives everyone directions about where to sit, keep the doors clear and stay on the right side in sort of a huddle around him. He makes sure everyone is qualified, has a cashier’s check up to the amount they are willing to spend. If they don’t use the total amount of the cashier’s check, it is refunded to them at the end of the auction. The auctioneer then goes down a list of withdrawn or postponed properties.
Finally the bidding begins! He begins by describing the property with the address and some numbers including the county assessment number; then a disclaimer about how there are no guarantees as to the condition of the property and how it is being sold as is.
The bidding starts with the banks minimum. That is the price the bank has decided it is willing to take. Sometimes that price was close to the balance on the defaulted mortgage and other times it was less than half.
The auctioneer calls out the opening price and the first bidder can go a penny over that. If no one else bids they win that property for that exact price. If others bid it goes up in increments of $100. If there are a lot of bidders the auctioneer might go up $500.00 to weed out some of the bidders. Highest bid wins the property.
It is very important the buyers do as much as they can to inspect the property and its records. They should be sure there are no liens against the property. Do a drive by and try to physically inspect the property as much as possible. If it is vacant they can try to peek in the windows.
I really wanted to see if this was really a good option to purchase San Diego Real Estate. In conclusion I found there were some excellent deals. If you can do enough research to ensure you are getting a good deal, have the cash sitting in an account somewhere, and factor in costs of repair, this could be a viable option.
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