How do I buy a foreclosure?

Slowly. Here are some hard-learned lessons from my last couple of foreclosure deals.

1. Remember, the seller is a bank. And, they have 100's if not 1000's of foreclosure listings. You might think that those numbers would inspire speed and efficiency, and that they would gratefully receive your offer with champagne toasts. You might expect that they are so happy to have an offer that they will accommodate your requests for a longer inspection period, to turn on the utilities, or to close later. Sadly, no. They may not acknowledge your offer for over a week. They will not accommodate you with anything except a ridiculously low price. Relax. It's not you, it's them. And keep your eyes on that ridiculously low price when you feel discouraged.

2. Be patient, but don't expect the bank to show you the same courtesy. After waiting a week to hear back from them, they will send you a curse counteroffer with a 24 - 48 hour deadline. When you reply with speed, you will wait another week to hear back from them. My advice is to roll with it, and to be prepared by knowing your bottom line before you even make your first offer. That way you will be ready to respond within their time limits, which are not negotiable.

3. Flexibility is next to godliness. Be ready to follow their instructions in terms of earnest money, inspection periods, closing dates, closing attorneys, and pretty much everything else. Then, be ready to adjust when they change their minds. Many listing agents who work with foreclosure listings have set rules that they ask you to follow when submitting an offer, but then when the asset manager from the bank gets your offer he or she might have other ideas. Just be ready to roll with it. Remember that ridiculously low price...

More to come...