Tips For Buying a Dallas Foreclosure Home
There are lots of savvy Dallas homebuyers who want to hit the jackpot by buying a Dallas Foreclosure because they believe that many of these homes are under priced. When banks price their foreclosed and REOs (real estate owned) homes under the comparable home sales they often receive multiple offers. This means that you could be up against some strong competition for that Dallas home that you really want. Sometimes the bank will take the top two or three top offers and then ask theses selected buyers to resubmit, what is known as their "Highest and Best" final offer. Other times the bank simply accepts the best offer upfront. Here are a few tips to help you select the right price and terms so your offer will be Highest and Best: 1) Get the Property HistoryAsk your Dallas Realtor to find out the bank's purchase price, the amount the bank took the property back at. Typically, this amount can be obtained from the state tax rolls or a local title company. Compare that price to the price the bank has the home listed for and then look at the amount of loans that were once secured against the property. Somewhere between the original mortgage balance and the amount the bank took the property back will be the amount the bank will accept from a buyer.
2) Determine Comparable Sales
In most cases, the list price has little to do with the value of the home. The area market value carries the most weight. If you are up against competing offers, other buyers will offer more than list price.·
Take a look at the last three months of comparable sales for that neighborhood to determine how much this home is worth. Only use those homes that most closely match the REO/Foreclosure home regarding square footage, number of bedrooms, baths, amenities and condition.·
Also, look at pending sales. Ask your Dallas Realtor to call the listing agents for these pending sales to try to find out the accepted contract price. Some Realtors will share that information and others will not.·
Look at the active listings as well. These listing are the competition for the REO/Foreclosure home you want to buy. Also, these homes are most likely the listings other buyers will use to formulate a price because they are the only homes those buyers actually tour. 3) Analyze Listing REO Sold ListingsMost REO agents work for only one bank, sometimes, two banks. Some of these listing agents are exclusive listing agents for the banks that own these REOs, and they do not list any other types of real estate. Since REO agents deal in high volume, they typically apply the same pricing principles to all their REO listings ie. price per sq. ft.. · Ask your Realtor to look up the listing agent in the Dallas MLS. · Get your Realtor to run a search using that listing agent's name to find the last three to six months of that agent's listings. · Also, have your Realtor pull the sales and listing history of those properties to determine the listing price to sales price ratio. If many of those listings are selling for, say, 4% over list price, then you may need to offer 5% over list price, and vice versa. 4) Ask About Number of OffersIf there are no offers on the REO/Foreclosure home you are interested in, you can probably offer less than list price and still get your offer accepted. If there is more than just your offer in on the property, you will likely have to offer a price higher than the list price. Keep in mind that some of those offers might be all cash and banks like all cash offers. If you are obtaining financing, then you may need to increase the price on your offer to even be considered. 5) Submit Preapproval LetterJust like with any other home purchase you want to submit a mortgage prequalification letter to the REO Bank along with your offer. Generally, it is an advantage to get pre-approved for mortgage financing through the bank that is selling the REO/Foreclosure home because banks don't trust other lender preapprovals but trust their own departments. There are great values to be found in the for . Make a list of your need, wants and desires like neighborhoods, style of home, beds and baths, special amenities, square footage, etc. Once you complete your list search Google to find the to represent you and walk you through, step-by-step, the Dallas foreclosed home buying process.
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