This isn't about the number of Northern Virginia foreclosure properties that are receiving multiple offers (they are) but about a strategy for buyers who are looking to buy foreclosure properties. Over the last few months one of the options that I have suggested to some of my buyers is a multiple offer foreclosure strategy.
Now before anyone comes unglued the first thing to remember about making an offer on a foreclosure property is that an offer is just an offer. It is NOT considered ratified until the bank has not only reviewed the offer but has signed the offer AND the addendums. Until that time all you are working with is an offer NOT a ratified contract.
Perhaps this is a rhetorical question but if the average time to get a response is 5-7 days (not counting weekends) and what you get back from the lender (via their agent) is a verbal counter what do you have to lose by having multiple offers out at the same time? In Virginia in order for a real estate contract to be considered valid it must be in writing, so until all the T's & C's are signed no one has an obligation to move forward, neither the buyer or the lBank.
It is surprising to hear the number of buyers who are walking away from a foreclosure property after being on the hook for months waiting for an answer. They are focused on one house and only that house yet there may be multiple foreclosure properties in the same neighborhood. In fact if you consider that you could also have offers working on both short sale and foreclosure properties at the same time your chances of getting an answer back on a property and actually ratifying a contract are increased by the number of offers you have circulating.
Now the biggest issue with this strategy is keeping track of your offers. Face it Virginia contracts can produce a huge mound of paper! A simple spreadsheet can keep track of where the offers stand. So unless the foreclosure you are considering is the home of your dreams then think about changing your strategy to work multiple properties at one time. There isn't really a downside and it might help you get into a bank owned property faster.
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As an Associate Broker with RE/MAX Allegiance in Northern Virginia and native of the area I can assist you whether you are buying, selling or renting a home anywhere in Northern Virginia. For more information about the area or my services you can check VaRealEstateTalk or my Northern Virginia website.
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Helping buyers and sellers throughout Northern Virginia. Specializing in support for military relocations including Fort Belvoir, Quantico, Pentagon, MDW and other BRAC locations.
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Hey Cindy. I like your idea, actually. It would address the issue of people having to eliminate down to one house and then cross their fingers that the bank is a responsive one...Missed seeing you Friday. Hope you're well.
Cindy, that is interesting, we are writing on foreclosed properties with multiple offers. Here if it gets accepted and you have written on another home, then you will be under contract for 2 homes.
Cindy, you are so right about keeping track of your offers...I like the spreadsheet idea.
Cindy, that makes sense to me. I'd be a little nervous about my ability to keep track of everything. And I'd have to have messages pre-programmed into my Blackberry so I could quickly get withdrawals out for offers with a slow response. I've done this with two or three outstanding offers, but we always had some sort of contingency that the buyer could use in an emergency. With foreclosures, you usually don't have an out once the bank signs and delivers the papers.
Natalie-It isn't for the faint of heart and not all buyers may be comfortable with the strategy but it keeps the process moving especially in the areas that I work with multiple foreclosures and short sales all on one block. I'm sorry I couldn't make it on Friday too!
Missy-since everything has to be in writing here and most of the counteroffers from the bank come verbally it doesn't end up with a buyer having two ratified contracts. Agents need to follow their state rules for what constitutes a ratified contract.
Dawn-I have a spreadsheet with the basics and then the comments and offers/counter-offers noted. It makes it easy to take a look at each buyer and know where the offers stand.
Patricia- I'm still collecting "pink slips" from sellers who aren't in foreclosure and I'm finding that at least the banks are responding with counter-offers. Strange since you think owners would be taking a look around them and saying why are all the foreclosures selling but not my house?
Cindy, it depends on if the buyers is an investor or a first time home buyer. Investors are very picky in this market and are very selective on which properties they are wanting to buy , however, i am sure that if another deal popped up they would jump on it . If it's a first time home buyer, it would depend on their personalities and how much stress they can take. If you go intoa home after shwing recent sales and selling how good the neighborhood is and say ok lets go find another one and cross our fingers than i'm not sure how a first time home buyer could take all of that. I am sure they're consulting with different family members and friends who are homeowners without you knowing and it may break them. Go write some offers...
Charlie-different approaches work for different buyers. I have some buyers now who have a strong constitution and we are working the multiple offers approach. Working with buyers is never a one shoe fits all approach and if a buyer has the least bit of hesitation I would never suggest they try this option.
Response time on offers with foreclosure listings is really a problem in our industry and there is no excuse for the lack of professionalism in this area.
I couldn't agree more. My husband and I are buying a foreclosure right now. We selected 3 to offer on and all 3 of them had 3 offers a piece. We would not have gotten any if we turned in one offer at a time.