Negotiating Real Estate Foreclosures

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As in many walks of business life, your ability to negotiate with various parties – to put together winning deals is crucial to success with foreclosures. In other words, you’ll need to be able to hold a meeting with the seller of the real estate you’re after and make him put pen to paper. Deal-making is really important when you’re in the real estate business and here are some things you need to consider:

They need to feel comfortable that you’re offering a good and fair deal and when someone likes you personally, it can really lead to a far smoother deal. Reading up on topics like structuring deal and even books on “how to make people like you” can really help you in this regard.

To negotiate successfully you need to follow the steps laid out below:

(1) Listen to what the other party is saying…understanding where they are coming from will allow you to assess any potential deal with a lot more clarity.

(2) Try and find common ground with the seller before you get into the deal (what do you have in common? Sports? Love of pottery? Find something and use it as an ice-breaker).

(3) Understand the sellers problems and concerns and make it KNOWN that you appreciate and understand these concerns, (4)Make a clear offer and EXPLAIN exactly why it’s a perfect deal for the SELLER instead of you.

(5) Create an incentive in the sellers mind on exactly why they should take up your offer – use the power of fear and greed to make them sign on the dotted line, and always include a “time-frame” by which they need to respond.

If you can follow these five steps, you will have a lot of success in buying up good-value foreclosures. You can also find good foreclosure deals via auction houses - this is what we look at below.

Some Tips For Investing In Real Estate Foreclosures Via Auction Houses:

There are many foreclosures listed in property auctions throughout the country (and indeed the world). Many serious real estate investors flock to these auctions when looking for real estate bargains, but there are many issues to consider before going down this route. Here we will investigate some of the main points you will need to think about when choosing to purchase foreclosed properties via auctions:

-  Do you have expertise with real estate auctions? If so you can proceed comfortably, but if you have little or no experience it is worth visiting a few auctions prior to actually participating.

- Know the real estate offered at the auction (that you are interested in) inside out prior to the auction starting. This means you will need to know your sums very well – have an idea of what the real estate is worth at market value, and have a clear idea of your minimum and maximum bids. Create a very detailed plan before you step foot in the auction house and stick to that plan no matter what.

- Have a clear understanding of the laws that apply to the real estate and be aware of any obligations and liabilities that you would take on were you to purchase the property under auction.

When you are analysing a real estate (this should be done prior to the auction day) have a very clear idea of what the property does and does not include. This will help you to come up with a realistic maximum “good value” bid you can make come the auction date. You should create a checklist for the property, and some of the points which should include are:

- Architecture (Period)

- Number of levels

- Age

- Number of rooms (break down into bathrooms/bedrooms etc)

- Parking

- Views

- Proximity to local amenities including  public transport, shopping, recreation, schools and so on.

- Condition of the property and all rooms inside

- Condition of the roof & other exterior

Only by evaluating these features will you be able to value the property correctly.