Foreclosure in 90630>Question Details

Grace, Home Buyer in 90630

Do I need to have the full asking amount in cash/proof before being considered on a bank owned property?

Asked by Grace, 90630 Sun Oct 26, 2008

The house I am interested in is considered a bank owned property. I contacted the listing agent and they have told me that I need to have proof of the full asking amount to even see/preview the house. Soon after, the agents contacted me and have told me the house has already been sold. However, the lockbox and for sale sign are still present at the house. I have been skeptical about the agents answers, due to the popularity of this property. I would just like to know if this is legal and if the house is still on the market if there is a lockbox and sign still present at the house.
Thank you in advanced

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Thank you for all your wonderful answers.
I have checked with my realtor and a few more around my area and it turns out the listing agent was not very interested in selling the home. I called the listing agent again to confront him of his lies, he brought up numerous excuses saying that it was the lender's choice and that he had no control. He even told me it was sold when later I found out that there weren't even any offers. So basically, he didn't wanted to complete this transaction. I don't know why, but I surely will never reference nor recommend him to anyone I know. Although I was not able to purchase this home, in fact, never even see it, I have learned alot.
Again, thank you for your answers and I consider all of them to be the best answer.
1 vote Thank Flag Link Tue Oct 28, 2008
Grace -

A point of clarification for you. An REO (Real Estate Owned) property is just that - already taken in foreclosure and OWNED by the BANK. Offers on REO properties typically get approved quickly since the bank owns the property.

A Short Sale has to do with properties not yet taken by the bank and, still owned by the seller (subject the the existing mortgages). "Short Sale" means that the value of the property is less than the amount required to payoff the loan balances and the seller likely cannot make-up the difference at closing. Handling short sales is an "art unto itself" because the listing agent has to work with the seller and negotiate on their behalf with the lender(s). Short Sales take a long while to get approved.

In either case, you do NOT need proof of full asking price in cash to make an offer. As I said before, get yourself a Realtor who will work only for you on your behalf.

Good luck as you move forward,

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1 vote Thank Flag Link Tue Oct 28, 2008
The best value of the year so far was an REO house that had been trashed inside, so the listing agent didn't think a loan would be approved for the property and would only consider all cash offers. It got 17 offers in the first three days it was on the market. I was really bummed because I knew I could have gotten a loan for it.
1 vote Thank Flag Link Mon Oct 27, 2008

1) Get your own Realtor that will represent YOU. The listing agent has a Fiduciary Responsibility to represent the seller - NOT you.

2) If you want this house (assuming it's not really sold) make sure you are 100% pre-approved by a "Direct Lender" such as one of the large national banks. You will also have to proove you have the funds required to close escrow - the down payment, and closing costs plus your pre-approval for the loan.

3) Have your Realtor write the offer you want to make. (S)He will submit it to the Listing Agent. The Listing Agent MUST submit it to the seller (unless the seller has given specific instructions not to submit additional offers - highly unlikely)

4) Have your agent check the MLS to see if the status has been changed from ACTIVE to either Backup or Pending. If the property is truly in contract the status must be changed or the Listing Agent and Broker face stiff penalties from their Association.

If you are not successful in this purchase, move on - there are plenty of properties available. You must be ready to make offers quickly on Bank Owned properties.

Hopefully, this is helpful...

Best of luck!
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1 vote Thank Flag Link Sun Oct 26, 2008
A lock box and sign will stay on the house through the close of escrow. Just because those 2 items are there now does NOT mean it is necessarily available. Contact a listing agent on many of these REO/Bank Owned homes is like trying to call your shoe and have a conversation. I didn't say ALL, I just said some. Sounds like on this one you dialed your shoe. Typically, you would need proof of any down payment funds to go along with any offer you might make. To have proof of funds for the entire asking price of the home just to see it is the most ridiculous thing I have ever heard. They might have said to you (while trying to qualify whether you were a "real" buyer) that you would need proof of funds to make an offer and maybe you heard it differently?? If they called you back and said it was sold, what they probably meant was that the bank has already accepted an offer.

This is why I do not recommend a potential buyer calling the listing agent because many times the translation is lost.

You can view all the bank owned homes here I can easily help you if need be. Email me back the address and I'll get all the details for you.
1 vote Thank Flag Link Sun Oct 26, 2008
Grace, even if a property has accepted offers, it is common for the lockbox and sign to stay on the property for the length of the escrow process. Because REO agents are so busy, some will tend to overqualify a buyer to verify they are not "wasting" their time showing property. You might be better off working with a buyer's agent to represent you on your purchase. Feel free to visit my website for more information, or email me to ask any other questions.

Good Luck,
Jeremy Lehman
Century 21 Beachside
1 vote Thank Flag Link Sun Oct 26, 2008
I would get in touch with an agent you trust to do some research and inquiries regarding the property you are interested in. It is not unusual for a lockbox and sign to remain at the property after an offer has been accepted and the home has been 'sold'. The buyer still has the right to inspect the home. In addition, the loan and escrow will take at least 30 days to complete so the sign will likely remain during that period.

You do not have to pay cash for a bank owned property. Many, if not most, are purchased with a loan. That part of your conversation with this agent is suspect. Again, I would ask an agent you feel comfortable with and trust, to call the agent and find out what the story is with the property in question.

Best of luck to you.
1 vote Thank Flag Link Sun Oct 26, 2008
I bought a bank owned Cypress, CA home for myself earlier this year. The other agent was very helpful. So don't get discouraged. There are all types of agents out there. Also realize that the nature of the (bank owned) beast is different from regular resales. Banks have a lot of stuff on their hands, their asset managers are interested in getting rid of them, the agents also have a lot of work, - a lot of it is commodified and people don't have a lot of patience. Therefore, you need to have more patience and also work a lot harder. And don't expect the bank owned property to be always in ready-to-move-in condition as maybe a regular resale home would be. Good luck.
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0 votes Thank Flag Link Wed Nov 18, 2009
On virtually every bank owned property in order to put in a bid you need a pre approval letter or proof of funds letter if purchasing with cash, it is unusuall they require both to even see it, however most agents will ask if you have been preapproved and by who to make sure you can qualify for the property before seeing it. Once an offer is accepted the for sale sign stays "fo sale" until the bank signs teh offer, could take 7 days and teh buyer provides committment and any contingincies are met where it then will be switched to pending or sold. the lock box stays on until closing as teh agent needs to do constant checks of the property, the home inspector and teh appraiser need access as well. When looking at bank properties you should have an experienced buyer brioker to work for you and on your behalf set up the showings so you do not have to deal with listing brokers on your own, it would stop what you faced.
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0 votes Thank Flag Link Tue Oct 28, 2008
Hi Grace,
In order to see a bank owned property that is listed, you do not need to have this proof that you mentioned. I have shown many bank owned (REO/Real Estate Owned) properties. The bank owned properties are also often called Short Sales (because the bank comes up short on the repayment of the loan). Usually to place an offer on a bank owned property you will need to show: proof of funds for your down payment (not the entire asking amount), a copy of a check which would cover your down payment, usually 3 bank statements, proof on employment, and a pre-qualification letter from your lender. In order to buy a bank owned property you would not need to have the entire asking amount. I am wondering if the agent miscommunicated and was referring to a trustee sale, which would be held on the County steps and, in that case you would need a check with the entire amount of the sale.
Next, I can tell you about this particular property if you email me with the address. I can research it's status, and let you know what the deal is on that popular home.
Best Wishes,
Ellen Bosworth
0 votes Thank Flag Link Tue Oct 28, 2008
Email me the info on this property and i will Find out exactly whats going on my email is Sometimes this agents will put it on hold if they might have a chance in their part of getting the buyer for that property so they can double end the commision side.

Oscar Ortega
Century 21 Realtors
0 votes Thank Flag Link Mon Oct 27, 2008
Dear Grace...I represent tons of buyers of bank owned or reo properties and am known as the Reogal..and I've never heard of that...seems sneaky to me...perhaps you misunderstood her...many listing agents ask for proof of funds...but that does not mean you need to show you have the total amount in cash for a means where is the down coming from..etc...a bank account, gift from mom and dad? etc...
And yes, the listing agent is representing the bank....not need to get a buyer's agent who will represent that your agent will make offers for you when you see those that interest you...and your agent will represent your best interests..not the banks. Even if a house is sold...and I assume she meant, an offer had been accepted...and it is probably still in escrow...she can leave the sign up to capture more's an old ploy but a good one...that many realtors still do today....til the day the property is truly sold, whether bank owned or not...Get a buyer's agent to find this out for you...and if they are not taking back up offers, then move on to others that are available...good luck! Shy 310-429-4170
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0 votes Thank Flag Link Mon Oct 27, 2008
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