Buyers of foreclosures need to act fast

Foreclosures are being listed at far less than what they likely eventually will sell for – a marketing strategy that generates high interest and multiple bids, some say. As such, buyers of foreclosures need to be prepared to move quickly and come up with a lot more money.

For example, Liz Sidorowicz, a real estate professional with RE/MAX Signature, says she helped her client submit an offer for a foreclosure in Mount Prospect, Ill., for $421,000. The home was listed for $350,000, but her client still lost out to a higher bid.

“I managed to win one out of five last week, but we overbid significantly,” Sidorowicz told The Chicago Tribune. “We got the unit and then it didn’t appraise. So we have to come up with more money down to make the deal fly.”

Some homebuyers who bid on foreclosures have to learn the hard way just how competitive snagging a foreclosure bargain can be.

“The consumer gets burned on a house they really like once or twice,” says Michael Goodwin, an agent at Exit Real Estate Partners in Chicago. “After that happens, they get war-hardened. The next time they are ready to pounce. Not very often does it wind up being the first house. It takes them getting slapped in the face.”