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Lynn Cotter
"Where Value and Service Meet"
Lakeland, FL 33803
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Foreclosure Offers

Pro Tips for Making An Offer on a Foreclosed Property!

In this market, many buyers are frustrated due to the overabundance of investor competition.  "Cash is king" stands true in many circumstances - but not all, and certainly not when you have a strong offer prepared.  I'm going to list a couple of tips for you to think about when you're preparing an offer for a Lender/Bank owned property that may give you the edge in the end.


  • Banks, for the most part, know the condition of their properties.  Before a property is even put on the market, they have several appraisals and Broker Price Opinions completed on the as-is condition of a home, taking into account of any needed repairs, and then list the property accordingly.  Typically, there is no need for you to factor in condition into the offer, because the bank has already done so in the list price.  With that being said, get a full home inspection to protect yourself against 'hidden' issues with a home that an appraiser or valuation specialist may not see in plain view (ie. sinkholes, structural issues, subflooring issues, etc). 


  • Minimize inspection clauses.  While we highly recommend all of our buyers to perform full inspections on their investments, 2 weeks is a long time to delay the sale.  Keeping inspections to a maximum of 3-7 days is preferred by most lenders. If you don't feel inspections are needed, of course, banks would prefer more - but I always recommend protecting yourself and getting some sort of inspection on the home.


  • High Escrow Deposits. A high deposit means you're serious about the property. A typical buyer will put down between $500 to $2,000 escrow. Many banks stipulate 1% of the purchase price at minimum.  To go much higher than that may improve your chances at the win.


  • Pre-APPROVAL. Many buyers submit their offer with a PreQUALIFICATION.  Preapproval letters tell the lender you've already been approved at the underwriting level, where as a Pre-qual is a basic credit check & a debt-to-income ratio letter. Not qualified yet? We work with many lenders that would be happy to help if you're having trouble finding one!


  • Go big or go home at multiple offers. When there are multiple offers on the table, and the lender requests your highest and best offers - that is it. You do not get a 2nd chance after this. You need to discuss with whomever you need to discuss with, to determine what the property is worth to you at its highest value, and put it out there. For financing offers- please consider the appraisal value - mentioned later.


  • Minimal/No Closing Cost Concessions. While closing costs are great, at highest and Best, you might want to reconsider. 3% closing costs is recommended if concessions are desired in your offer.  If it goes to a multiple offer situation, I'd recommend losing the concessions, or increasing the offer to make up for the concessions to strengthen your offer.


  • Make sure every line is filled out in the Contract. Many Banks prefer every single line be filled out (with either 0, or N/A as needed) and every page of the contracts be initialed. Failure to submit a completed offer may lose you the property due to timeliness and need for corrections.


  • Closing ASAP. Banks prefer a closing date that happens sooner than later. All cash offers should close as soon as the title work can be completed (7-14 days), and loans as soon as underwriting is done (which is approximately 30-45 days).


  • AS-IS. Banks prefer you make an offer on the property as-is - rather than request full repairs.  While gambling on the bank agreeing to the repairs may occur on homes listed on the market after a while, during multiple offer situations & the home first going on the market, it's recommended to offer based on as-is condition unless you make a very attractive offer (probably over list price).


  • DO NOT OVER-OFFER WITH FINANCING OFFERS- Banks have their properties valued many times before it goes on the market. They know the appraised value of a home, and if you think you have enough in a prequalification to beat other offers in Highest & Best - you may have to consider what is REASONABLY highest and best.  Many lenders are now stipulating if your property does not appraise at the offer price, you will have to pay the difference out of pocket - proof of funding must accompany the offer showing you have the funds available to pay such a difference.
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2130 E Edgewood Dr, Suite 3A. - Lakeland, FL 33803
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