Top 5 Myths for buying Nashville Foreclosures!
1. Another huge wave of foreclosures is right around the corner!
Tennessee’s foreclosure peak was a few years ago. There are five significant factors which indicate that the next wave of foreclosures in this area will be less than currently predicted. Relocation into Nashville continues to rise. Unemployment is falling and we are seeing the gains in the healthcare and manufacturing jobs. Foreclosure alternatives are becoming more popular with banks and lenders. Banks continue to ease credit standards, and loan more money. The shadow inventory and delinquencies are down in Tennessee.
2. Buy foreclosures directly from the bank!
It is nearly impossible to purchase a foreclosure directly from the bank, unless you are buying it at the foreclosure auction. Getting anyone at the bank to talk to you about the property is next to impossible. If you are persistent, you may be able to find out the listing agent contact info. Call the listing agent, and get them to notify you when the home is listed.
3. Submitting lowball offers is a good strategy!
Lowball offers have a 99.9% rejection rate. Low offers usually annoy the asset manager involved in making the decision to accept you offer. Do you want to annoy the seller, or buy the property? Why would anyone sell a home for $45,000 when it is listed for $99,900?
4. Cash buyers get huge discounts!
Cash buyers may get preference over an equal financed offer, but do not think you are entitled to a significant discount. A Cash transaction may save the seller 30 days of carrying cost or approximately 1% of the sales price. Not a huge incentive to significantly slash the price.
5. Foreclosures need a lot of work!
Some buyers continue to have a negative perception of foreclosed homes. Around 30% of the homes that I sold last year were in average condition or renovated by the seller. This trend will continue as banks see the benefits of differentiating themselves from the competition. Foreclosures in average condition typically sell quickly, so do not delay.