A subscriber and I were going over a property set to go to auction in the next few days. The amount owed was ridiculous in terms of current value, but the foreclosing first would clearly change all that when it went to auction. As we spoke I asked if she had made an offer yet? She said, No. She was considering bidding. You see, she and I had spoken before and she had seen the writing on the wall and pulled her money out of the stock market well in advance of this decline that seems to be catching many people unaware. She knew that stocks are a variable that can be good at one time but can drop in value, just as equity can. She also knew that the stock market cannot exceed its own value forever.
That said, the money she had taken out near the market high had already proven her wisdom. She would not have as much to invest in real estate today if the market still held her assets in the roller coaster of the last week. The joy in her voice was self-evident. She was right and she is still right.
So we went over her options to bid at auction, and the potential opening drop bid the lender would have to create in order to secure a buyer at the Trustee Sale. I pointed out an important fact. The lenders do not want the Trustee Sale auction to happen. It just looks bad to the Real Estate Market if too many homes go to auction. It is better for everyone if the lender accepts a Short Sale Offer.
My suggestion to this wise investor was to make an offer, even though the Trustee Sale is only days away. The sale has not yet been postponed. We all are seeing postponements every day now. I pointed out that I had felt that the lenders were postponing for no obvious reason other than to limit the number or PERCIEVED FORECLOSURES. They are letting people stay in the property until an investor makes an offer and opens escrow. Based on this notion, I suggested she make an offer for less than the expected drop bid price and be ready to haggle it out and get a great deal. I expect to hear that they have an escrow open any day now.
She has my confidence because she understood all of the instructions we gave her. I believe that this is the solution for all of our retirement needs. Whether we want a great price on our own home that will weather a drop in equity in the future, or we want to pick up income properties that will make our futures comfortable and FREE of financial worries, Foreclosure investing is the way to go. Finally I pointed out that you can always get funding with an offer, whereas at the Trustee's Sale we need all cash. Either way we get a deal, and that is a lot better than staring at the computer screen and watching your retirement go up in smoke.