How to Buy Foreclosures in Santa Maria: What Type of Offers do the Banks Want?
- Cash Offers. Banks love cash offers. Why? Because they can close quickly and without any requests for repairs from a buyer. What is the down side to a cash offer from a bank's point of view? Cash offers tend to be lower than financed offers. However if the banks knows the property is in very poor condition, they will accept a lower cash offer over a higher financed offer in the hopes of not getting mired down in repairs.
- Offers with limited or no contingencies. Banks want to limit the possibility that the buyer will back out. Submitting a limited or no contingency offer has its risks for buyers and should not be done without consideration for the fact that you may lose your deposit if anything goes wrong. However, even if you don't limit contingencies in your initial offer, it is pretty standard for banks to counter with a limited inspection period and a limited timeline for securing financing.
- Conventional financing. Banks prefer conventional financing offers to FHA or VA financing offers. Accepting an offer with FHA or VA financing may require that the bank to make repairs to the property. In fact, VA financing will not allow the buyer to pay for repairs, so the seller must make the repairs. FHA financing allows the buyer to pay for the repairs; however many FHA buyers cannot afford to given that FHA is a low down payment financing option for those who do not have a 10% or 20% down payment saved. Nowadays, conventional financing will typically require at least a 5% down payment, but more typically it will require at least a 10% down payment.
If you are looking to purchase a foreclosure in the competitive Santa Maria or Orcutt market, you need an experienced agent to guide you through the process of making an attractive offer that the bank will accept. Call me today for a free foreclosure buyer consultation (805) 878-9879.
Tni LeBlanc, Broker
Copyright © Tni LeBlanc 2010*How to Buy Foreclosures in Santa Maria - What Type of Offers do the Banks Want?*