Linda Davis, a RE/MAX Realty Group broker who writes the Eastern Connecticut Real Estate Blog , passed along these tips for those interested in buying foreclosed properties:
1. Complete all the bank requirements before submitting an offer. If the bank requires you to sign and initial 41 pages of documents, don't debate the subject unless you really don't want to buy the house. That is why they are called requirements.
2. Your attorney will hate the required bank addendum and try to change it. (See #1)
3. Don't assume a bank foreclosure is a great deal. In my experience, great deals are hard to find, and most foreclosures are listed at fair market value. If you are willing to do repairs, you may find a good (maybe even great) deal on a house that needs work.
4. Although the price on a bank foreclosure may drop eventually, banks usually don't accept a "low ball" offer. In some cases there is even a secret formula of how much lower than the list price an asset manager can accept. Once the price is dropped, the formula is reapplied.
5. Closing dates can't be mushy. Time is of the Essence. Bank sellers expect you to close on or before the closing date of the contract. They don't accept excuses and will often charge a per diem if you are not ready when they are.
Read the rest here.