It said straight up, "Don't call us, we will call you when we hear. We have no control over the banks and their time frame." So we waited, it took many weeks but our clients are now in their home. I did another foreclosure and it was fast and easy. It really depends on how many are in their portfolio.
Short Sales don't always mean a good deal...
Any updates as to how this situation turned out for you? My husband and I are first-time home buyers with our pre-approval and are putting in our offer tomorrow for a bank-owned home.
Just curious how it turned out.
-Dylan Borland, Realtor
Coldwell Banker Preferred Realtors
Plymouth MI real estate
As a professional in the mortgage industry here in Michigan, maybe I can shed some light on the process for you. Let me say first of all that if you are seeking to purchase a foreclosed home then the best thing I can preach to you is PATIENCE. Missy said it right when she said don't call us we'll call you when we hear something. Although there are some exceptions, deals like these (especially when it also comes to minimum down payment financing) rarely are going to close in a 30 day time span. Here are some potential reasons
1) In some cases there are multiple mortgages on the property. If someone took out an 80/20 loan (remember those?) then there may be 2 separate lien holders who need to sign off on your offer. This complicates the process a lot
2) Sometimes the bank that is listing the home is only the servicer on the loan, and doesnt actually hold the note. This means that the bank needs to go to the "investor" and get the authorization to go ahead with the deal.
3) Depending on which bank you are dealing with, some of them are grossly understaffed. If you keep up with business news, seems like you can't go a week without an announcement of a big bank laying off thousands of workers. Bank employees are asked to do more with less resources, and while some larger lenders have giant divisions dedicated to moving their foreclosed properties, some of the smaller guys don't and these bankers see foreclosed properties as a nuisance and push them aside til they have to deal with them
Bottom line is when dealing with these properties you have to take the good with the bad. If you are working with a good agent and a good lender they should do their best to educate you on the process and set your expectations properly so you don't feel as frustrated. That's what they get paid the big bucks for :)
This is the system I imagine....
1. They've already picked the #1 offer - (The friend of the REO manager who has cash and closes in 2 days) But they have to try to get more.. so...
2. they "counter" to everyone who put a bid in. This is probably at least 5-10 but sometimes it can be as high as 50-100
3. Some original bidders drop out as they know the house was already at "market"
4. The remaining bidders drive up the price with second bids
5. The bank goes silent for a long time. I think they know that the more time, the more it will bring a third offer to them.
6. After a week, 2 or a month "average frustrated investors" or novices freak out and start wondering what is wrong, if they are going to get the house, etc.
7. The more frustrated buyers start putting in another bid, higher than their second. Just like the bank had planned and paid some Harvard expert to prove true.
8. They look at all the bids after 60 days and if one is better than the 1st "go to" guy with cash, then the guy with the better offer wins.
There it is. It feels right to me.
I've said this over and over in previous posts.... The F-word is for the novice or average frustrated investor. What makes people think that putting an offer on a foreclosed house is going to get them the best price? You can count the number of TV ads promoting a system that teaches how to buy foreclosures.... That makes 50 other people dropping offers at the same time, at a price that was already "market".... That's just crazy talk. You want a deal, ok I can understand that but you are not going to find it with a foreclosure without one of two things 1. cash and personal connection with a REO manager or 2. a overpriced offer that you beat 15 other people for.
It's easier to knock on a door of a house that needs repair and say "my wife and I are looking for a home in this area and yours looks cute from the outside". Do you know anyone selling in this area? A hand written note works well too. My closure rate is almost 70% on the notes.... And you get the best deals with no competition.
If it is any consolation, I have a buyer that is about 5 weeks into waiting on an answer for a short sale and now the bank wont even commit to when they will have an answer. Originally we were given the impression that it would take 4 weeks. I think they are feeling a lot like you are. Remember, you do have the option to look at other homes. You are not locked into a contract to purchase that home. Unfortunately, banks can be slow to respond. Your response within 72 hours was exceptional and it set you up to think that they would always respond that quickly.
Another question even though I do have to just wait it out, is there any way of putting more pressure on the bank without stressing out my realtor. The listing agent seems really laid back, it may be because he is used to the process. However, I feel like there is only so much my poor realtor can do, I want to go over her head and contact the listing agent myself. Is that unethical??
I've heard of banks taking more than 30 days several times.
Also to give clarity. We signed a PA however we had to retract it because it didn't include everything that was discussed. So now we are back to square one, Coutner offering. We just recently found out that it seems like the bank rep lost the good faith estimate from the Mortage rep and the listing agent had to refax to them on the 24th. So at this point we are still playing the wait game. The listing agent has worked with this bank before and keeps telling our realtor for us to wait a little longer. We just had a friend that purchased a bank owned estate and it only took 3wks time. This is such a stressful experience when people you know are closing alot sooner on bank owned homes