Buying a foreclosure can be a great opportunity to find a nice deal on a home. Today in The Poconos there are 349 foreclosures listed on the Pocono Mountain MLS out of a total of 3,266 listings (10.68%). That isn’t a whole lot. Especially when you factor in that the number of foreclosures that sold in the Pocono Mountain MLS last year was 1,247 out of 3,524 total sales (35.38%). Now you may be asking, “What does it all mean!?!?!?” It means that people are buying foreclosures at a rapid rate. If you wish to compete with this fast-paced market, here is some advice.
1. Find a good local REALTOR who knows the community that is of interest to you. You, as a buyer, might have some piecemeal knowledge of the community or of foreclosures generally, but a solid REALTOR can give you up to the minute details and nuances about the local market, what is happening right now, and what similar homes that aren’t distressed properties are going for presently. Find a trustworthy and knowledgeable REALTOR first and foremost to help you navigate the home buying process with ease and confidence.
2. Have a budget and a plan BEFORE you go to see homes. Imagine this: you meet with your REALTOR, you go and see some foreclosures, you find one you really like – a great deal! Now you go home and start to plan what you are going to do with this house and how much you can spend to do it. While you’re planning out your next 30 years, somebody else puts in an offer on that same house and now the home of your future is under contract with someone else. Remember the old adage, “you snooze, you lose”? It is still applicable today. Don’t be caught sleeping and miss out on a great deal because you were not prepared. It is disappointing to learn this lesson the hard way – though most do – and more disappointing to learn it the hard way more than once!
3. Do not rely on Trulia and Zillow to give you accurate information! These web sites are not as current as the Multiple Listing Service (MLS) and they do not understand market trends the way a professional local REALTOR does. It is understandable that in today’s technological world, the easiest tools for consumers to use are the most frequently used. But if Trulia and Zillow are not up-to-the-minute current and neither service has experience and knowledge such as someone who services an area professionally, then are they the best tools? A local REALTOR can send you information directly from the MLS – information backed by tax records, market research, and professional opinions.
4. Consult with your REALTOR sales agent about your offer. Your REALTOR represents YOU and YOUR interests! You need to have an agent you can trust to represent you and keep you informed of all pertinent information. If you don’t trust your REALTOR, you need a different one. It is useless to “play it close to the vest” about your maximum purchase price, when a good REALTOR is going to advise you on how to get the best deal possible anyway. As a REALTOR myself I can tell you, nothing is more disheartening than when a client misses out on a deal they were truly excited for because they were holding back pertinent information. Ask your agent what a good offer is and discuss where you are at financially with him/her. It will make a huge difference in your quest to get a great deal.
5. Low-balling banks will get you nowhere! If the price is $40,000 and all signs in the market are pointing to this price being below what it could or possibly should be, then an initial offer of $15,000 is just a waste of everyone’s time. First of all, you have to wait to hear back from the bank (usually a full business day). Then, you run the risk of losing out to someone who made a respectable offer on the same property. A lot of people think this is “part of negotiation”. Starting with too low of an offer could end up costing you the property you want. If you follow tip #4, your REALTOR should be able to advise you on what a respectable offer would be while keeping in mind your top purchase price, the listing price, and how these figures play into the local market.
Thinking about buying a foreclosure? Here is a list of all foreclosures for sale in the Pocono MLS right now!