Foreclosures, bank owned properties and short sales are now the largest segment of our market in SW Florida. They represent the most listings, the most closed sales and the largest source of new listings. In my previous post I had listed some statistics regarding Cape Coral's parallel markets and where a buyer might fit within the sales data.
The best selling properties in Cape Coral are the bank owned foreclosures on the lowest end of the pricing scale, from approximately $125,000 or less. The other segment that seems to be moving very well are waterfront homes under $300,000.
Some things to remember when considering a bank owned foreclosure home purchase in Cape Coral;
- Get pre-approved through the lender or mortgage broker of your choice prior to shopping for a foreclosed property to buy. If you are seriously looking you will need a letter stating that your credit, income and assets have been VERIFIED and that based on that information you are pre-approved for the amount you wish to finance.
- Once you find a suitable property remember the bank who owns the property has no knowledge of the condition of the property and makes no guarantees of the condition, they alway sell "as is" and therefore an "as is" contract must be used when making offers. There will be contingencies for inspection and for financing within the "as is" agreement.
- The bank will typically respond to your offer in less than a week, they may counter offer, reject the offer or accept the offer. If they don't approve of the offer they may not respond at all.
- Expect to provide a full pre-approval letter along with the offer, there is no sense in trying to make an offer without a pre-approval letter or proof of funds if paying cash. Extra cautious banks might also require a copy of the earnest money deposit check, proof of funds for the down payment along with pre-approval and/or a conditional mortgage commitment.
- If/when the bank approves the price and terms of the offer they will generate their own addendums, anything contained in these addendums overrides the original contract (offer). The addendums could be from 6 to 18 pages and will be based on the terms and price of the original agreement. They must be signed as is without changes. As a buyer you may cancel the agreement if you don't agree to the terms of the bank addendums, typically the earnest money check is sent to the closing company at the same time as the earnest money check.
- The bank will use their preferred closing company which could be out of state to do the title work and close the transaction.
- Closing will typically occur 30-45 days from the time the bank addendums are signed and returned along with the earnest money check and other required documents. Closing in a timely manner is crucial because any delays caused by the buyer, the buyer will be charged as a per diem rate that could be as high as $250 or more.
- Earnest money deposit amount shoud be 1% of the purchase price at the very least.
- Although foreclosed properties now owned by banks are prominent in the market, remember that all banks do not price their properties the same. Some properties are priced well below the others and given the condition is comparable to higher priced listings, there will likely be competition from other buyers, sometimes on the first day the home is listed.
- Properties that have been on the market longer might be overpriced or in sub-par condition, these properties are acceptable for a low ball offer of more than 20% lower than list price. Any listings less than 30 days old a low ball offer is not recommended.
To view some recommended bank owned and foreclosure properties in Cape Coral, Fort Myers, Lehigh Acres and Bonita Springs/Estero please visit my web site by clicking here. I have hand picked some good deals for many types of buyers. You may also want to call or email a request for a specific type of property for which you are searching. In this case you may want to be set up on automatic email alerts for properties matching your needs.
Martin Untch
Seawinds Realty, Inc.
Foreclosure Buyer Specialist
martin@swfldeals.com
www.swfldeals.com
Martin Untch
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