Many bank owned properties in Colorado Springs are receiving multiple offers since there are fewer foreclosures available in the Colorado Springs Real Estate Market. The number of foreclosures has not necessarily dwindled, it seems as though banks are choosing to create a demand for these types of properties by releasing a few at a time from their inventory. Reducing the supply of bank owned properties will not only increase the demand for them but banks will probably net more for their properties since they are receiving multiple offers.
As a buyer, you can plan on competing against other offers if you are interested in a competitively priced bank owned property. With your agent’s guidance, you can determine how much to offer for the home and decide where your purchase price limit will be. When multiple offers are on the table, the bank will ask each buyer who has submitted an offer for their highest and best offer. At this time, buyers can increase their offer to make it more appealing to the bank and to outbid other buyers who are interested in the property.
The listing agent will not disclose the amount of the other offers so deciding how high to go can be stressful for the buyer. Although it may be difficult, it is important not to get emotional during this point in the process which could result in overpaying for the house or experiencing buyer’s remorse. In the situation where there are many offers on one property, buyers must also realize that coming in with an extremely low offer will, in most cases, be a waste of time.
Banks like to see buyers who are qualified so getting prequalified or even better, preapproved by a lender is a must. Banks also like to sell their properties within 30 days so submitting an offer that will take longer than 30 days to close will not be appealing to the bank.
Lastly, submitting an offer on a home that is not going to pass FHA or VA guidelines may be rejected by the bank since most bank owned properties are sold as-is. If the terms offered in the MLS are Cash or Conventional only, find out if FHA or VA financing is even going to be an option prior to submitting an offer. If there are health or safety hazards clearly apparent in the home, it probably will not pass FHA or VA guidelines. Examples of health or safety hazards may include exposed electrical wiring, mold, broken windows, etc…
Don’t get discouraged if your offer is not chosen by the bank, you are bound to find something else with so many properties for sale in Colorado Springs. If you are sitting on the fence and still deciding whether or not to buy a home in Colorado Springs, the window of opportunity is slowly shrinking. Interest rates are starting to climb back up and a higher interest rate translates into a higher mortgage payment.