About Buying Bank Owned Homes in Arizona

[h4]Our team has learned a lot while helping clients purchase bank-owned foreclosed property here in the Phoenix Area.

Below we try to point out some of the things you may encounter when you meet with us to view and purchase these properties:

What you DO get:

• Property at discount pricing (recently, in some areas, up to 75% or more below 2006 values).

• Pricing "all over the board" - Banks use a type of "comparable market analysis" called a BPO or "Broker Price Opinion" to set the initial asking price on a property.  Generally, people performing these "BPOs" are licensed real estate agents who are working for the banks, usually for free, in order to earn future business listing properties for the banks.  For this reason, as well as several others, pricing for bank owned homes can be "all over the board" when a property first comes to the market.

• Multiple-offer situations -  Some banks use a strategy where they will price a property at a very low price to create somewhat of a "buying frenzy."  This is a  technique that tends to work in the bank's favor to sell the property as quickly as possible.  In many cases the property will sell for a higher price than the bank may have received had they priced it at current market value.  Yet, many times for much less meaning a great bargain for the buyer who bids highest.  The banks will get several bids that are at, or above, asking price.  What typical happens is that the potential buyers will be asked to submit their "Highest and Best."  This is a blind auction for the property.  The buyer then has one opportunity to adjust their price to the highest they're willing to pay, and adjust their terms to what might be most suitable "best" for the bank.  The buyer who's offer is best overall will receive the opportunity to move forward with the purchase.  What we've learned is that it is not always the bidder with the highest dollar amount that gets the property.  It is based on several factors in the banks point system.
  

• Addendums, Addendums, Addendums - In all bank-owned property transactions, once the bank accepts an offer, they will counter that offer with a long list of addendums.  In a nutshell, these are additional terms and conditions that a buyer must accept before the contract is considered fully executed.

What you DON'T get:

• Bargaining power - Many buyers think that because the bank owns it, they must REALLY want to get rid of it.  This is true, and they have a ton of it right now at the time we're writing this (March 2009).  Banks will not shave much off the pricing for the first 30 days that a property is on the market.  Usually, we will see a decrease in price within the first 30 days.  Banks (and all banks have their own "system") will "systematically" drop the price until they hit "the sweet spot" and the property is sold.  It is usually not possible to get any more than 10% off of the current asking price at any time.  What we are seeing now is that this usually does not come into play.  Most bank-owed homes are moving quickly with multiple offer situations.
  

• Repairs -  All bank-owned properties we've encountered have been sold, "AS-IS." It is highly recommended that you do get a property inspection to help bring to light any defects with the property.  Asking for a full inspection period (standard 10-days in Arizona) is not out of the question.  In multiple offer situations buyers will waive the inspection period in hopes that it will make their offer more attractive to the bank.  In any case, we have found that banks are more willing to de-clutter the property and restore pools to a standard cleanliness before the close of escrow.  It is standard for us to write such requests into the original offers for our clients.

What you DO GET WITH US:

• #1 AND MOST IMPORTANT - Experienced Agents who know how to negotiate these type of transactions.
• Professionalism, Honesty, Accountability, and Timeliness.
• State of the art internet search technology to alert you of new properties that match what you're looking for.
• A long lasting client to agent relationship.

These are just a few of the common things we have learned by going through a number of bank-owned transactions.  Like any real estate purchase, each transaction is a little bit different.  If you have any questions you'd like answered about the process, or any information on properties you see on our website, please call us at 480.291.3434 or Send us a Message here .  Also, please Register with Us by clicking here.

Thanks,

The crew at BankOwnedArizona.com.