Foreclosure Activity Keeps Falling in Wisconsin
Earlier this week, Paul Gores of the Milwaukee Journal-Sentinel reported that Wisconsin Foreclosures dropped to a 17-year low.
That’s good news and a positive indicator for the Wisconsin economy! Foreclosure filings are down 12% compared to this time last year. Southeastern Wisconsin (Kenosha, Milwaukee, Ozaukee, Racine, Walworth, Washington, and Waukesha Counties) are performing even better than state average with a 15% drop! Wisconsin is clearly in recovery with less than a third of the foreclosures today compared to our worst period between January-June 2009. Wisconsin home sellers should also be pleased that they are no longer competing against bargain-basement foreclosure sales.
However, the other side of the story is that the lack of foreclosures hurts home buyers. Not only are foreclosures bargains for buyers, but they help keep sellers humble, lower average community sale prices, and are additional inventory in the market. These buyer benefits are lost with the drop in foreclosure filings.
What’s can buyers do? We all know adding money helps a buyer’s offer. Let’s talk about making offers more attractive without increasing the purchase price!
- Offer more earnest money. Remember, earnest money is money you put down to show that you are serious. It is applied against the purchase price of the house. More earnest money does NOT raise the purchase price, although you stand to lose more if you back out of the deal for an improper reason. Whenever possible, offer a minimum of 1% of the purchase price as earnest money. I recommend 2%+ to grab attention.
- Your agent should be asking the listing agent when the seller wants to move. Whether the seller needs a quick or an extended close, do everything you can to give it to them. Help the seller like you and your offer!
- Avoid government-insured loans (FHA, VA, and USDA) with their additional rules and restrictions if you can get a conventional loan. Sellers always prefer fewer rules and less trouble!
- Wisconsin’s financing contingency requires you to name the type of loan, down payment amount, and highest acceptable interest rates. Listing agents know to review these contingencies carefully. A low highest acceptable interest rate is more likely to fail. The higher the down payment, the more likely the deal is to survive bumps in underwriting. Don’t play games by listing tough-to-achieve interest rates and try to have the highest possible listed down payment. Remember, down payments are applied against the purchase price of the house; a better down payment does not raise the price!
- Decide whether specific inspections, tests, and contingencies are absolutely vital or whether you can do it later- if at all. Given the option, sellers choose offers with fewer tests and contingencies over more tests and contingencies!
Do you want help structuring your offer to win bidding wars while not overspending? Let’s talk! My name is Mike Kwiatkowski and I am a Broker Associate with Coldwell Banker Residential Brokerage of Brookfield, WI. It will be my pleasure to help! Email me at Mike.firstname.lastname@example.org or call 414-207-2938.