You may yet get the last laugh. This sounds like Southern California some time ago where the values skyrocketed-but later dropped. A lot of folks could not unload their properties for the loan amount at that time. Sooner or later Atlanta like any other market will hit a glitch and you will be there to pick these things up for a bargain.
This sales process sounds like the process used car dealers such as CarMax use with their no-haggle pricing. It seems surprising to me that a normal retail buyer would be able to get their lender to close in 14 days at full market value without any contingencies. Are banks and other conventional lenders this quick?
Posted by Warner(ATL) on April 08, 2000 at 15:02:25:
After printing out approximately 70 foreclosure properties from the MLS, I had a very good and interesting conversation with a real estate broker who represents over 40 national lenders who’ve take back property here in the Atlanta area. In an effort to curtail the administration and “extra” work involved in the normal negotiation process (especially with investors), and due to the overheated market here (I know most areas have strong sellers markets, but here in HOTlanta its almost insane), they have gone to a single price strategy for all the homes they sell.
This means the banks will not entertain nor accept any offer other than the list price and if its to high for you, then you wait it out until they drop the price then you submit the offer. In addition there is no finance contingency, nor any other contingency for that matter, and you must put down a whopping 3% of the purchase price and be able to close in 14 days or else lose it.
The broker was very informative and went on to explain how these lenders truly view Atlanta as a profit center and expect to make money on their foreclosures. I’ve personally followed a REO (Inside - 285) which was listed as a handyman for 36K two years ago, today has a firm price of 100K!!! without any work being done, with pending offers of 85K and 94K. I’m sure my fellow investors in Atlanta can appreciate this, for inner city property values “inside the loop” have truly skyrocketed over the past 3-4 years.
I found this interesting, because the method is apparently very successful. Thank God they are the only ones doing it. Oh well…back to the grind.