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Tuesday, February 01, 2005

House 1, Offer 1 - Not Made

After speaking with the listing agent, I decided not to make an offer on this property. There are a couple of reasons for my decision:

  1. This is basically an auction, with the highest bidder getting the property. My offer was going to be way below market value, so odds of me getting the property were low.
  2. Since this was a VA home, the offer needed to be made on the VA forms and not a standard real estate offer form. The forms were available inside the property but since I was not using a Realtor to buy this property, I did not have access to the inside.
  3. The listing agent did not want to act as my agent as well because that would require me to fill out a form that stated I knew he was acting as an agent for both buyer and seller. He didn't want to do this. (I guess filling out the form is not worth doubling his commission on the sale.) Because he wouldn't do this, I didn't have access to the inside of the house to get the forms. My Realtor lives about an hour away and I didn't see any point in making her drive out there just so I could submit an offer that had almost no chance of being accepted.
Before I made the decision not to pursue this, I did call my bank to get the letter the VA requires of cash buyers - a simple statement from the bank showing I had enough cash in the account to cover the offer. Within 5 minutes of making the call, I had a fax from the bank. I didn't realize they would do this and this is a useful thing to know for future offers. If I were dealing with a distressed owner of a property, that letter would be powerful evidence that I could close quickly.

3 comments:

Matt J said...

Shaun,
I agree, that is useful to know that the bank can fax you that info so quick when you need it. I was wondering if you would be willing to provide some insight to a couple of questions. I've noticed that you have clear and straight forward answers. When dealing with preforeclosures, how do you find out the 75% value? It's easy to get the original deed amount from the recorders office. How do you find out what is still owed on the first mortgage? How much if any is owed on the second or third mortgages? What the TMV on the property is? Is the easiest way to find the TMV to drive around the neighborhood of the property and compare similar properties that are for sale? When approaching a homeowner for a short sale, what paperwork need to be signed by them off the bat? I appreciate any insight you would have on these questions.

Sincerely,
Matt

Shaun said...

These are really very basic questions. I suggest doing lots of reading to educate yourself. Visit richad.com, creonline.com, thecreativeinvestor.com, and others. Do google searches for "property valuation" and "amortization calculator". You'll remember the answers better if you figure it out for yourself.

Manu said...

Shaun,

Just a quick FYI to let you know that the forms to bid on a VA foreclosed property are available directly online and it is a pretty simple process. After making 3 offers myself, I am doing all mine and give them to my agent...

Here is the link:
http://www.ocwen.com/vendee/VA_Financing_Forms.cfm

They also list all the VA properties they have through the US on that same website.

-Manu

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