The president of the Florida Realtors association says there are now 3 to 4 offers on every foreclosure being listed. So how can you compete and win more offers in order to save yourself time, keep your income consistent and keep the profits stacking up?
Be Faster
Half the battle in winning contracts on foreclosures is speed. Often the first one with a reasonable offer wins the deal. Have searches set up to so that you are consistently getting fresh new deals in your inbox every morning. More importantly, build relationships with the best wholesalers so that they call you immediately when they have a new deal in the works and will give you the first shot at it.
Make Bigger Deposits
Sellers and their agents love big earnest money deposits. It lets them know you are serious (while of course securing their commissions) and dramatically reduces the odds of you backing out. Of course most investors constantly strive to make the smallest possible deposits to reduce their own risks. How about meeting in the middle? What about offering a second deposit within a few days? This allows you to do your due diligence and get out if the deal isn’t what you hoped for while minimizing the downside and making your offer more attractive.
Fewer Contingencies
Needing to make ‘As-Is’ offers is a given when things are moving this quickly. However, some banks are refusing to allow any contingencies for backing out at all and even refusing to permit inspections. While it can certainly be foolish to buy any property without proper inspections, the fewer demands and contingencies you try to sneak in, the higher your odds of landing the deal. If you are flipping houses, you need to prepare your end buyers to buy from you in this manner too.
Knowing your market inside and out will go a long way towards helping you make better offers with fewer contingencies. Focus on a smaller farm area, drive it regularly and get familiar with every property so you instantly know a good foreclosure deal when you see one and have a good idea of its condition.
Make Cash Offers
Cash is still king. Your offers are much more likely to be accepted if they are cash offers than relying on you obtaining any financing. However, making ‘cash offers’ when you really don’t have cash will only cause you problems. The alternative is utilizing transactional funding for quick cash closings and obtaining a proof of funds letter from your transactional lender to provide with your offer.
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