A Few Things About Foreclosures
What is a Judicial or Court of Queens Bench Listing?
What a Judicial Listings is not, is a motivated seller. A Judicial Listing is a Court Ordered MLS® Listing of a property. The bank has obtained a Court Ordered to list the property for sale. At this point, the sellers could still catch up the payments and end the Court Order. The Judges who evaluate all offers to purchase are more sympathetic to the people and not the banks. What that means to potential buyers is the Judges rarely if ever accept an offer below market value. They care more about the people than the banks profit and loss statement. If no offers get accepted after a determined time limit, the court will terminate the listing and transfer the legal title to the property to the bank.
Do the banks accept low-ball offers after they get possession of the property?
No, because the banks dominate the mortgage business it would be against their best interests to accept low-ball offers. Accepting low-ball offers would knock down the price of nearby properties they also hold mortgages on. Banks would be shooting themselves in the foot if they dumped all the foreclosures on the market at once and took below market offers. If you do see a foreclosure that was sold at what appears to be a low price - It probably needed a lot of work. So the price was fair market value. Banks control the real estate market.
If Banks and the Courts are not Motivated Sellers, Who Is?
A motivated seller is anyone that Has to Sell vs those that Want to Sell. Divorce causes a lot of forced home sales. Loss of Jobs, transfer of jobs, transfer of kids schools, bad money management, estate listings, disgruntled landlords, people tired of all the home upkeep, forced downsizing, etc. There are lots of truly Motivated Sellers willing to sell below market value for every foreclosure out there. And there are lots of people watching the new listings daily that snap up the great deals before you've had your morning coffee.
How can you tell if someone is Motivated to Sell below market value?
Number one is you have to know general market values for the area you are looking at and the style of homes in that area. In other words, you need to do some work. There's always someone working just as hard or harder than you are to find the great deals that pop up. After a while of studying the market and viewing lots of properties, it gets easy to spot something out of the ordinary that might be an opportunity. Then you write an offer with your Realtor with the price, terms and conditions that you want!
What kind of Terms and Conditions do Motivated Sellers want?
They want all cash offers with no conditions or terms and a quick closing date. If you want a lower price, you shouldn't weaken your offer by adding any crazy sounding conditions and terms. If you do need a financing condition and home inspection condition the length of time you ask for can also weaken your offer. If it's a great deal, count on the seller getting a few offers to compare against each other. Put yourself in their position.
What other signs are there that a seller might be motivated?
Two people on the legal title and only one adult living in the home. Moving boxes already packed up. Deferred or ignored home maintenance. Vacant properties. Tenant Occupied Properties. Owner on the title is a company. Neighbours look sketchy. The neighbourhood looks run down. Size no longer works. After looking at lots of properties the signs generally jump out at you.