The Charlotte Real Estate market is experiencing a healthy sign as more and more foreclosures are receiving multiple bids! What does that mean for you as you consider your new Charlotte Home? Multiple bids throw a curve for foreclosure home buyers.
The typical Charlotte Foreclosure listing, as is common throughout the Real Estate market, lists Foreclosure prices at a slight market discount. Slight? Yes, most of the homes are initially discounted slightly as the bank/lender gages market activity. After a few weeks, the price is incrementally decreased until activity picks up and a contract is offered. Many people still believe what they see on TV and expect lenders to take pennies on the dollar for their foreclosure listings; not so much in Charlotte.
Consider the fact that it is the banks duty to minimize their losses. The bank negotiator must initially weigh out each offer. For example, a Foreclosed home is listed at $250,000 and the bank is lowering the price by $5,000 every two weeks. A buyer offers $200,000. The bank knows that it would takes months of lowering the price before they would reach that price. The vast majority of these offers are rejected and a reasonable counter offer is made. The bank typically considers a 10% concession as fair. Each bank is different and nothing is on stone. Offers below this are typically not serious buyers and in Charlotte, there are enough real buyers out there.
Recently I have experienced a surge of multiple offers. We won some and lost others. When it comes to multiple offers you must weigh out your decision. If it is for your primary residence, you must realize the real market value. It does not matter that the "list price was ____". What is the home really worth and what is it worth to you. No one wants to pay too much for their home but is it worth losing if it is still a great deal?
I have seen many multiple bid situations go well over list price, I have seen banks accept a lower offer if the terms were greater and I have seen some actually still be under list price (largely because many buyers refuse to participate in multiple offers). You must offer what you feel the home is worth to you and not a penny more. Accept the fact that someone may pay $1000 more than your perceived value and that is OK. Accept it as not worth what you were willing to pay.
How about if I bid greater than the home's true value? There is an appraisal clause in your contract. If the home does not appraise, you can get out of the deal and get your earnest money returned, perhaps renegotiate (if both parties agree) and or still follow through with the sale (if you choose). Naturally there are contract dates for everything and your Realtor must be aware and keep up with the contract.
Charlotte Foreclosures continue to sell and our spring market is showing great signs of improvement. Relocating is a huge undertaking and I am here to help.