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How much you should offer on a pre-foreclosure or bank owned property depends on a few different factors, but if you play your cards right, it could lead to a really great deal on Plainfield on Naperville real estate.

Plainfield and Naperville Short Sales:

If you are making an offer that has not yet been foreclosed on and that is subject to bank approval, you are making an offer on a property that is still in the possession of the homeowner. The owner decides which offers make it to the bank for the final approval. Offers that are too low will eat up the buyers time in which they may elect to decline the offer; but offers that are close to or near market value may entice the lender to accept less than what is owed to satisfy the debt of the homeowner in default.

Short sale approval can take anywhere from 1 day to 8 weeks, depending on the lender, and the amount of accounts in default that a case manager is handling. Most lenders are in the process of negotiating hundreds of loans in default. The response of each lender will be determined by the efficiency of the way the required information is packaged by the person in charge of handling the short sale.

If the sellers financial information is missing or incomplete, the file will sit on a desk, unaddressed for days or even weeks! The case managers are overloaded with files from sellers in default and they will not chase down the person in charge of the short sale for missing information. If you have an offer in on a short sale and you have not received a response after 4 weeks, ask the person handling the file to check with the lender to make sure that all required information is on file and accessible to the case manager. You need to make sure that the person performing the short sale has good contact with the bank and that they are proactively pressing the bank for a decision.

Plainfield Bank Owned Properties or REO’s:

Bank owned properties are corporate owned homes that have been sent to the auction but which were returned to the bank’s possession when there were no bids offered above the banks opening bid. (which is usually for the amount that is owed.) These properties are then marketed by an experienced REO agent who sets the price, taking into consideration the condition of the property and the banks desire to quickly sell their property at a fair market price. On the other hand

How much should you offer for those distressed properties in Plainfield or Naperville?

What condition is the property really in?

Are the repairs cosmetic or is there structural damage that needs more than just a little elbow grease? Homes with serious issues such as structural damage or mold issues will always be the most deeply discounted properties on the MLS, but they will also require the most amount of money and time in repairs, especially if the mold inside of the house is toxic. The next two areas of the house that will yield a decent discount it damage to the drywall, the carpet or flooring, sinks, cabinets and counter tops… and missing mechanical appliances such as a furnace, air conditioner, sump pump, & hot water heaters. The final degree of discount comes from the things that may not be perfect, that are easy and inexpensive to fix.

What kind of cash reserves will you have to make repairs?

Most of the homes that area bank owned will need some kind of work. They may need new carpeting, appliances, landscaping. Keep those repairs in mind when discounting the property by comparing the Plainfield or Naperville neighborhood values to the amount of work, and the amount of money that needs to be spent, in order to bring the property up to the neighborhood market values. Make sure you will have the money available to you to make those repairs, especially if they are required by the lender (for FHA loans) or by the village.

Are there other offers on the house?

If you are making an offer on a pre-foreclosure home in Plainfield or Naperville and you find yourself in a multiple offer situation because the listing agent discloses that there are multiple offer on the property; it is always in the best interest of the buyer to bring your best offer to the bank. Presenting offers to the seller is the first hurdle to overcome, but then you still have to get the bank to agree to the loss it is willing to accept. Most often the real negotiation begins after the offer has been handed off to the bank. A seller that truly understands the process, knows that they have the best chance of having the short sale accepted by their lender to avoid the foreclosure, by getting the best offer as quickly as possible.

A few tips from an agent in the trenches:

• Don’t submit a ridiculously low offer if you want a quick response.
• Lenders will not typically accept offers asking for seller paid closing costs, points, or fees. There are exceptions, but only when the contract is heavily negotiated. Make sure your financing is solid you want to be taken seriously.
  
• Lenders will NEVER accept an offer that is subject to a home sale contingency. Never, ever, ever. Nope, just to be clear it won’t happen.
  
• The bank will most likely counter any offer that comes across their desk. It’s their policy, and I always expect it to happen and anticipate it.
• Most short sales take anywhere from 2-8 weeks for approval. Foreclosures are at record all time highs, and there are a limited amount of loss mitigators in each department.
• A contract that is subject to bank approval is not fully executable until it is accepted by the lender, which means your offer could be bumped mid process by a better offer. This is subject to debate by several local area attorneys as to whether the contract becomes fully executable when signed by the seller, or when it is approved by the bank. I would refer to a real estate attorney to clarify if this situation were to arise.
• Liens, property taxes, and homeowners association fees need to be paid prior to closing by the seller (lender) and it’s important to take those losses suffered by the bank when assessing the loss the bank is willing to accept.
• On an FHA loan, the minimum amount that a bank can accept on a short sale is a NET offer of 82% of the APPRAISED value of the property. This is what the bank needs to see on their side of the HUD on the closing or settlement statement.
• Only work with an agent who knows about the foreclosure process if you are buying a pre-foreclosure or bank owned property.
  

If are looking for an REO or pre-foreclosure house in Plainfield or Naperville, IL, I can provide you with a current list of properties available for sale in the area. It’s really important to be pre-approved for a loan before you even begin to look at these types of properties because the lenders are looking for a quick close. I can arrange a meeting with one of the mortgage brokers that I work with if you are ready to get pre-approved for a loan.

Call me for your complimentary list of foreclosed or pre-foreclosure properties in the Will county area at 630-673-6233 for access to the hottest market in real estate right now.