Dealmakers Blog – Ramblings of a Real Estate Mogul

As an active real estate investor we have roughly 40+ offers on bank owned homes at any given time, and are always looking for great deals at the County Foreclosure Auctions.  Negotiating to buy bank owned homes is not always that easy, however perfecting the formula will allow you to get some incredible deals.

Example:  We recently went into escrow on a 4–plex located in Glendale Arizona just minutes away from University of Phoenix Stadium where the AZ Cardinals play football.  The property was on the market for 249 days and the bank slowly dropped the price until it became a smokin deal.  Here’s the listing history below.

As you can see it started at $239,000 back in 5/08 and slowly dropped to $99,900.  Our 1^st offer was for $62,000, buying it “as is” and waiving all financing contingency with a $1,000 EMD(earnest money deposit) with a fairly quick close.  The bank countered our offer at $85,000 with 10% EMD which we counter them back at $72,000 “best and final” and accepted their 10% EMD request. We got the acceptance from the bank and opened escrow.

This is roughly a 30% decrease form the banks asking price.  The property is worth approximately $160,000 to $170,000 after we do a full renovation. 

Here are 10 Tips For Buying Bank Owned Homes and Getting a Smokin Deal.

Before making your offer you will need to:

1. Find a good realtor that can assist you in writing and submitting your contracts.

2. Acquire a Proof of funds letter from a hard money lender or a bank account balance that will cover the purchase price or a pre-qualification letter from your conventional lender. Real Estate Radio USA published a Hard Money Directory you can check out.

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