Hawaii Home Foreclosures – Lowball Offers and How to Make Them, Part 4
The tricks to lowball offers:
- Don’t miss out on a good opportunity—Unless you have a good reason “why” a property should sell for pennies on the dollar, then don’t lowball. REO properties are already “ON SALE” and the bank is following a strategic plan regarding the listed price and marketing of every REO. Chances are, if you are ready to make an offer on an REO, so are 4 other families. On average, my REO properties move quickly from list to contract in 16 days. Don’t mess around with lowball offers if you have your heart set on a specific property. You will lose! There are times when you can and should make lowball offers, which we will discuss.
- Be smart, know your market—Investigate by viewing properties in the price range and location of your chosen REO. Due diligence can be a lot of work, but it is also an effective way to get the answers needed to make an informed offer, or acquire the information you need to pass and move on to your second choice.
- Know when to make lowball offers and investigate different scenarios—Has the property been on the market over 100 days? Why? Perhaps it has been in and out of escrow. Why? Maybe it is simply because the last buyers failed to approve for their loan, or it is possible there is another problem. The listing agent is not always privy to situations on their properties until the first inspection. Any situation can present itself as a great opportunity to pay less if you have cash on hand.
In any case, if you can find a good and honest reason the property deserves a lowball offer, have your agent write a compelling email to the listing agent that explains the reason you are making such a low offer. For example, perhaps you were at a meeting last week with the Department of Water and they have decided to raise water rates by 100% in the area where this property is located.
If this is the case, you can be assured there will be an article in the newspaper. Scan the article and send it with the email to the listing agent. Hopefully, said agent will back you up and make a case for you with the asset manager. Maybe the property is located on Molokai where there is more than a 25% unemployment rate which considerably reduces the potential buyer pool of local residents.
Target properties that have been on the market over 100 days. Target properties that are not marketed well, only one photo on the MLS, no open houses. Target properties that do not show well, because most buyers do not have an imagination when it comes to fixing problems or performing rehabs. For more information on Hawaii home foreclosures, view my previous blogs.
Go forth and conquer!
Our offices are working upwards of 30 pre-foreclosures (properties not listed in the MLS) at any given time. To protect homeowners or tenants currently still living in bank owned properties, and because of MLS rules, we are unable to give out addresses of our unlisted pre-foreclosures.
However, as bank owned properties are able to be listed on the MLS, and if you answer a few questions below, we can contact you first when a property of your dreams is about to be listed. Also, be sure to check out my gallery on Maui Short Sales.
Please call or send me this information:
- Assets you desire in a property. ( i.e. acreage with a house and cottage, condo, 3 bed/2 bath, swimming pool, vacation rental on the golf course, etc.)
- Pre-approval letter or proof of cash. I would be happy to send you names of loan officers, so that you can be pre-approved and ready to make an offer.
- Preferred location (i.e. W. Maui, S. Maui, or an actual town such as Haiku, Kapalua, Kihei, Wailea, or a zip code).
- Phone number, name, and email address.
Kathleen Wilson, SSCP – Short Sale Certified Professional – Five Star Institute, RECP – REO Certified Professional – Five Star Institute and SFR – Short Sale Foreclosure Resource.