Want An Orlando Foreclosure DEAL? Have Your Act Together!

There is an increasing amount of interest domestically and worldwide from investors who would like to buy Orlando real estate for pennies on the dollar. It’s equally clear that most don’t have the first clue how the banks operate, although many like to act as if they know what they’re talking about, particularly when it comes how they intent to finance the deal. Here are a few tips to get you on the right track.

Rule 1: Don’t waste your time (and everyone else’s) by asking to look at homes – foreclosure or otherwise – until you’ve figured out how you’re actually going to finance the deal. When asked if you’re pre-qualified for a loan, too many say something like “No, but trust me – it won’t be a problem.” Whenever I hear those words, I know for sure there IS going to be a problem because it tells me that person hasn’t turned on the television or read a newspaper for the past three years and doesn’t realize we’re in the middle of the biggest credit crunch since the 1930s.

Newsflash: Condo financing disappeared more than 3 years ago. If you’re looking for an Orlando condo foreclosure, particularly a condo conversion under $100K, mortgages are virtually unobtainable, and if you don’t have the ability to pay in cash, then you won’t find many Realtors willing to show you anything at all.

As the tagline for The Apprentice goes, “It’s not personal. It’s just business,”  and in today’s market, you need more than a good down payment and decent credit score to get a loan on most condo projects or foreclosures. The truth is, banks couldn’t give two hoots about your credit worthiness since they’re no longer focused not on you, but on the risk involved in the community you’re buying into. If it’s not FHA approved (and few of them are FHA approved in Orlando (and Florida in general), then it has to be cash all the way – and has been for the last two years. Even in those communities where you could theoretically get a loan, the banks are receiving multiple offers on their foreclosure inventory – and they’ll always take a cash buyer over someone who needs a loan.

Sound harsh? Perhaps. But if you’re in the under $100K price category, you must first understand and accept that it’s actually a seller’s market in Orlando, and then it will make sense. With less than six months of condo inventory left, and up to a dozen offers on every bank owned Orlando condo foreclosure that comes out, it also means that more than ever before – cash is king. (If you’re in the $150K bracket and over, you can breathe a sigh of relief. You probably still won’t get a loan on an Orlando condo, but you could conceivably get one on a single family home foreclosure in a subdivision like MetroWest.)

Rule 2: If you’re sure that you’re a cash buyer, then your offer must be accompanied by a proof of funds. If you’re lucky enough to be getting a loan, then that contract needs to be accompanied by a pre-approval letter from the bank. No exceptions, no delays. If you’re shy about disclosing your financial status, stop reading right now.

Rule 3: The bank is calling the shots. If you find a bank owned property you want, then you better be prepared to submit a contract on it immediately and be prepared to close in double quick time if your offer is accepted. If you’re slow to adhere to bank timelines, the system will often reject your contract automatically. Contrary to what you may have heard, the banks aren’t playing around. And nor should you.

Rule 4: Inspections on foreclosures are usually for your information only. Distressed sale homes tend to be sold “as is, where is”. That doesn’t mean you shouldn’t have the home inspected, you probably should since you may still be able to back out if the home is a disaster. It just means you can’t go running back to the bank and ask for a discount if you don’t like the quality of the carpet. Not gonna happen.

There’s more you should know before you dive in, so if you’re serious about investing in bank owned single family homes, townhomes or condos in Orlando (including downtown Orlando condos) then give us a call on 407-290-3408 (or email Info@CondoMetropolis.com). We’ll run you through the entire procedure from start to finish, then, once you know the rules of the game, you can decide if you still want to play!

1 Comment

  1. You hit the nail on the head. We have been seeing multiple offers over the past 3 months on properly priced condos in Scottsdale. If you don’t have everything together before you even start looking your wasting your time.

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