Frisco TX Foreclosures: So You Wanna Buy A Good Deal?
Learn the Real Scoop When Buying a “Good” Deal
Part 1: Laying The Ground Work
Want to buy a $325K home for $243K? A $456K home over $350K? Or a $273K home for $225K? I bet you do and so would I. These are some real numbers and clearly achievable in the greater Frisco TX market areas. Since 2008, EVERY home buyer I work with have called me to assist them in finding a “good” deal. They actually mean buying a foreclosure. Good – Where do we start?
Laying The Ground Work
First – Let me define the word, Foreclosure. When buyers *think of foreclosure, what they mean is a bank-owned property that had been acquired through the foreclosure process. In real estate, foreclosure is actually a legal process of “taking” over the property due to the borrower’s inability to make payments. By the time the property reaches the hand of the bank/ lender, it has been foreclosed on.
What Goes On Behind The Scenes?
After the bank repossesses the property, it is assigned to an asset manager and goes through several internal procedures before it is available for sale in the marketplace. One of the procedures include market evaluation of the property. An appraisal is usually ordered for the property and an appraisal tell the bank how much the property is worth on the market. In some cases, the bank may order a BPO (Broker Price Opinion) from real estate brokers. Some banks order both appraisals and BPOs and some may choose to do one of them.
When a market value is established, and procedures are completed, the property comes on the market, available for sale to home buyers. This process may take 2 weeks, and some several months. By the time, the property comes on the market, how much was originally owed by the borrower/ previous homeowner becomes insignificant. By this time, the bank are not trying to recover what was owed, but to sell the property as quickly as possible based on the market value and property condition. Also, by this time, the bank had spent tenths of thousands of dollars to get the property back on the market including attorney fees, employee time, legal fees, etc. and the property condition has not changed.
How Does a Bank Price a Foreclosure?
This is the Million Dollar Question. It depends on the selling strategy of the bank and asset manager.
Some banks intentionally price it very low to attract multiple offers. Then, they hold it several days to wait for the multiple offers to come in before making a decision on which contract to accept. By this time, most buyers must submit their “highest and best” offer for evaluation. The key note here is the “highest” sales price may not always “win”. The bank only cares about the “highest” net to them at the fastest closing time to the most “solid” buyer. If the bottom-line net is within a few thousand dollars, the buyer with the most “credible” circumstance may very well turn out to be the winner, even without netting the bank the highest.
These are the “deals” that most buyers think about when they want to purchase a “good” deal. Stay tuned for the next part of the series on what to expect when buying a “good” deal.
Then, there are properties that are listed at market price or slightly below the market. These are the properties that many buyers ignore because they are out there in search of a “good” deal (see above). Based on my research of Frisco TX foreclosures, this is a great opportunity for buyers to purchase but comes with less competition and ultimately, less stress. In these cases, banks are often just as motivated to sell quickly and are willing to negotiate a “good” offer for the buyers. All you have to do is start, and then massage the negotiation process.
Next, What to Expect When Buying a Foreclosure?
View some pre-foreclosures/ short sales and banked-owned properties in Frisco, Plano and McKinney:
- When Foreclosures Hurt
- The Real Hard Truth about Homeownership
- Value Proposition of Your Realtor in Your New Frisco TX Home
- Top 10 Buyer’s Wish List in Frisco TX Homes
- Are You Ready for the Perfect Frisco TX storm?
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Systematic market approach to selling your home – an intentionally unique proposal that most real estate agents do not use. Find out why it is our differentiator and how past clients are on their way to the closing table with this proposition to home selling.
Realtor®/ Broker of 3:16 team REALTY
Super-serving Frisco, Plano, Dallas, McKinney, Allen, Little Elm, Prosper, Celina, Richardson, Dallas M-Streets, Dallas White Rock Lake area communities and other surrounding areas.
Copyright © 2009 by Loreena Yeo (3:16 team REALTY).
Originally Posted on Frisco-TX-Homes.com Frisco TX Foreclosures: So You Wanna Buy a “Good” Deal?