07.07.2022

How to whittle down the foreclosed home price

Any shrewd real estate investor is always on the lookout for a price break discount a point or two. This is the nature of the real estate market and especially the essence of the foreclosure deal. There are so many ways to chip away at the foreclosure deal for the intelligent investor it is hard not to get a discount. Any foreclosure hawk that walks into a bank and starts to immediately ask for the keys and pulls out the business checking notebook has to learn to take a deep breath and slow it down. The house is not going anywhere and if it is then there are 1.5 million right behind it is almost exactly like it in every way shape and form. The odds are in the favor of the one with the money to purchase that upside down and severely upside piece of real estate and this must be kept in mind at all times.

Banks lose whenever a home is foreclosed upon!

The bankers do not want to be bothered with touching a single piece of paper in regard to the property they just sold now have back. It is akin to the used car lot that has to repossess the 1985 Chevrolet cutlass supreme, they would rather the owner, the client, pay something anything as long as that vehicle is not returned by involuntary actions. The foreclosure market is even worse for the banks as they are 100% wrapped up in that sinking home and would go to great lengths not to have to see even a picture of their failure. Banks lose whenever a home is foreclosed upon and lose big all the time. There is no silver lining for the lending institutions’ that have to eat a business deal.

Step up and save the day

This is where the new and excited yet controlled real estate investor, (IE you), steps up and saves the day. Now of course the banker will pretend to be in full control with a very nice and expensive Italian suit and a Stoic and frozen face. This is the game for the bank as the role they are playing is the salesman once again, and you are the buyer. It seems like déjà vu, just like before, except instead of the wide-eyed fresh couple with the Bed Bath and Beyond credit card burning a hole in the wallet, it is a savvy entrepreneur that is about to receive a huge discount on the sinking property that sits patiently across the same table. Is this starting to formulate in the head? Are the wheels starting to turn and the dollar signs starting to be envisioned yet? They will as soon as the banker leers and says, “125,000, and it is yours!”

Pull out a chart

The deal is now on the table and although it is way high for a 3/2 with a broken window and a non-operational fireplace you sit there smiling, thinking, and plotting. The banker has seen it all before every poker-faced foreclosure expert sitting across from them waiting to crush that first offer. The next step is to pull out a chart that lists every single house on the same street as the foreclosed-upon house in question, and you then slip that piece of paper to the now-not leering banker. Gone are all the re-moves that the banker was going to use to throw you off, it is over and the price that you are going to pay for that sinking house the bank despises is written in dark black ink on the bottom. 57,000 is the final offer and as you strut out of the bank a smile comes across the face, or is it a leer?

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