The Arizona Republic reports that bidding wars for lower priced foreclosed homes in the Phoenix Arizona area are continuing. We can tell you from first hand experience this is certainly true. Investors who are paying cash are coming into the market and buying multiple homes at a time. For the single family/one home buyer who have to get a loan they are at a certain disadvantage. Individual home buyers can’t move as fast, they need more time to decide, and they need to get loan approvals.
Investors don’t usually really care what a home exactly looks like; they are just looking for “good deals” — homes they can buy inexpensively and then either “flip” or rent. Most individual home buyers want to carefully select the home that personally meets the needs of their family, so they may take time to measure, plan how things will look in the home, and need to get their loan qualification paperwork re-reviewed before making an offer. If there is obvious work in the foreclosed home that needs to be done, the individual home buyer many carefully bring in a contractor to help them determine costs – before they make an offer. All of these things take time. But while the individual home buyer is checking out these things that are important to them, investors are swooping in with cash offers- many times with offers above the foreclosed listing price.
It is not uncommon for the individual home buyer to be outbid on a number of homes before they are lucky enough to have been able to decide quickly enough on a home that they wanted an offer submitted. Once they decide their agent moves forward to get the offer in. But many times it is too late. We have worked with buyers who have been beat out by cash investors who acted very rapidly when a “good” foreclosed home came onto the market. We have seen this happen as many as six or more times to the same buyer. Some agents are reporting they have ended up submitting more than 15 offers before one gets accepted for their buyers.
Even if the individual home buyer gets an offer into the system, the banks may likely come back and ask the bidders for a higher price than has been offered. The banks may ask the bidders for their “highest and best offer”. In a case like this, a bidder may actually be bidding against themselves. (It is not ethical for the listing agent of the foreclosed property to divulge the other offered prices.) We have seen buyers lose a home because someone else ended up bidding only $100.00 or even $1.00 more than they did. This is frustrating for individual home buyers to say the least. We have even seen buyers being rejected and once the home closes the closing price was the same as they offered or even a bit less. Why would this be you ask? Most likely the accepted offer was for cash and not a buyer who needed a loan. Banks do like cash offers.
The buying environment for lower priced homes is very similar to what was happening at the height of the real estate bubble. Just as they did during the boom period, investors now are stocking up on homes, driving up prices and forcing traditional buyers to the sidelines in some areas.
Federal legislation designed to help people stay in their homes and also the pent up inventory of pre-foreclosed properties in the area has slowed the flow of foreclosures into the market, lowering the inventory and increasing the demand for remaining homes.
This is a great time in the real estate market for buyers, but as a home buyer you need to plan to have patience, as well as be prepared to act quickly. Call us at 480-201-3001. We can help you with referrals to lenders to get you pre-qualified. And we can walk you through what can seem at times to be a daunting amount of paperwork for these foreclosed homes. You need an agent who understands this market and who can help you.
If you are a first time home buyer who is going to be able to take advantage of the $8000.00 tax credit currently in effect, do not delay in beginning your search for a home. It may take longer than you think to find a home and get your contract accepted.
![[Facebook]](http://benjamin.com/phoenix-arizona/wp-content/plugins/bookmarkify/facebook.png "Low priced Phoenix Area Foreclosure Bidding Wars")
![[LinkedIn]](http://benjamin.com/phoenix-arizona/wp-content/plugins/bookmarkify/linkedin.png "Low priced Phoenix Area Foreclosure Bidding Wars")
![[MySpace]](http://benjamin.com/phoenix-arizona/wp-content/plugins/bookmarkify/myspace.png "Low priced Phoenix Area Foreclosure Bidding Wars")
![[Twitter]](http://benjamin.com/phoenix-arizona/wp-content/plugins/bookmarkify/twitter.png "Low priced Phoenix Area Foreclosure Bidding Wars")
![[Windows Live]](http://benjamin.com/phoenix-arizona/wp-content/plugins/bookmarkify/windowslive.png "Low priced Phoenix Area Foreclosure Bidding Wars")
![[Yahoo!]](http://benjamin.com/phoenix-arizona/wp-content/plugins/bookmarkify/yahoo.png "Low priced Phoenix Area Foreclosure Bidding Wars")
![[Email]](http://benjamin.com/phoenix-arizona/wp-content/plugins/bookmarkify/email.png "Low priced Phoenix Area Foreclosure Bidding Wars")
You must log in to post a comment.