Foreclosure in Westland>Question Details

Qiuana, Home Buyer in Michigan

First time Home Owner...Trying to buy a bank owned home

Asked by Qiuana, Michigan Thu Sep 27, 2007

My husband and I are first time buyers. We found a Bank owned home that we just loved. We already got pre-approved and are currently working with a realtor. We made an offer to the bank and they counter offered within 72hrs. We signed a purchase agreement and gave the EMD to my realtor. Later that week she figured out that the bank left out our 3% Ameridream gift out of the PA so we had to put another couter offer in for just 6% seller consessions by the Bank. We did that about 2weeks ago and still have no response. All together we are working with our realtor, who contacts the listing agent, and the listing agent works directly with the bank. We are both starting to feel like to many people are involved with this whole process. We begun this whole process with the pre-approval and everything the end of Aug. That's almost 30days!!! The EMD is still with the realtor because they haven't accepted the new offer. Is this normal?? My husband and I are getting really restless!

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No it will not do any good to pressure your agent. Here's why, we sold a foreclosure by a big real estate office in Oakland County. As soon as we submitted the offer we got our instructions on what to expect.
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.
1 vote Thank Flag Link Thu Sep 27, 2007
You need to see this video on buying a short sale versus a foreclosure.... It'll answer some of your questions and maybe make you feel a little more normal...

Short Sales don't always mean a good deal...
0 votes Thank Flag Link Fri Dec 18, 2009
That 3% that was not on the counter offer will change the investor criterion and is maybe why the bank is not responding to you. Your Realtor should have used care in making sure the contract is correct. Is the property still listed? If you are not sure and you want to pull out of the deal then ask for a cancellation and retain your EMD
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0 votes Thank Flag Link Fri Dec 18, 2009
Hi Qiuana,
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.
0 votes Thank Flag Link Tue Dec 15, 2009
yes this is normal when working with bank owned homes, banks are notorious for this, Its just something you have to go through when making an offer on one most of the time, its best to understand that it will take some time and know that your Realtor is looking out for your best interest and working for you, there’s really no way around it, if the offer is not accepted and things are taking to long, you might want to consider looking for something else, but if its a bank owned again be careful you could end up in the same situation. My last bank owned home took 3 months to close despite my best pressure on the bank.

-Dylan Borland, Realtor
Coldwell Banker Preferred Realtors
Plymouth MI real estate
(734) 416-9516
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0 votes Thank Flag Link Fri Oct 3, 2008
^.^ Here is the best strategy of buying a bank owned house. You should submit your offer on 15 or 30 houses that you like to buy, and then you buy a house from a bank who has the fastest response time. All in all, you are the one who has cash in hand, you don't need to wait for those banks who have slow customer service. oh ,,,,, by the way , you should never call them. in the game of buying a house from the bank, the one who call first, usually lose the game.
0 votes Thank Flag Link Wed Oct 1, 2008
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 :)
0 votes Thank Flag Link Sun Mar 2, 2008
My longest was 96 days from offer to close. I have heard of others taking 180 days. If you really like the house, hang tight. Hopefully it will happen sooner for you.
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0 votes Thank Flag Link Thu Sep 27, 2007
For you, i am putting my Foresclosure dreamy world for everone to see. :-)

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.
0 votes Thank Flag Link Thu Sep 27, 2007
Thanks again for all your responses. They are sooo helpful to me.

Question: What is the longest time the whole process took on any of your personal situations with Bank Owned properties? Any longer than 30days??
0 votes Thank Flag Link Thu Sep 27, 2007
Not hearing from the bank is SOOOOO normal and why I now just post the following for all bank owned properties.... Listen to the words carefully or you will be waiting another 30 days and get no response...

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.
0 votes Thank Flag Link Thu Sep 27, 2007
You were typing your response as I was typing my first answer. No, it will not help if you go directly to the listing agent. The listing agent does not have any control over how quickly the bank does things. I work with a couple of banks and they all respond differently. One makes immediate decisions when we present an offer. That is a rarity. I have had other agent's buyers call me to ask about an offer or prospective offer and all I do is tell them that I will let their agent know as soon as I know something. Unfortunately, there is nothing I can do to speed up the bank.
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0 votes Thank Flag Link Thu Sep 27, 2007
Maureen Fran…, Real Estate Pro in Birmingham, MI

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.
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0 votes Thank Flag Link Thu Sep 27, 2007
Maureen Fran…, Real Estate Pro in Birmingham, MI
Thanks again everyone for your responses!

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??
0 votes Thank Flag Link Thu Sep 27, 2007
This is normal, there is no personal gain to the bank so they take their own sweet time in responding. You basically went to the bottom of the pile when you started over. If you love the house and don't have to move just be patient. It will come together, but it takes alot of patience.
0 votes Thank Flag Link Thu Sep 27, 2007
Qiuana, Keep in mind you're not only dealing with the bank, but lawyers. Responses are usually not as fast as you received the first time. The note from your mortgage rep was good for so many days, look at the bottom.

I've heard of banks taking more than 30 days several times.
0 votes Thank Flag Link Thu Sep 27, 2007
Thank you for your responses.

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
0 votes Thank Flag Link Thu Sep 27, 2007
Hi Qiuana - I know it is frustrating but here in Michigan, the banks are taking a while to respond. The amount of people involved is normal. The listing agent represents the Seller, which in this case is the bank. Just so you know, your situation is not uncommon. Hopefully your agent is following up with the listing agent and staying on top of the situation. I know it's hard to do but right now you just have to sit and wait for the bank to respond. Good luck with your purchase!
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0 votes Thank Flag Link Thu Sep 27, 2007
Hi Qiuana. You say that you signed a purchase agreement and I am assuming you mean you jsut submitted an offer to the bank, but you don't really have an agreement yet since the bank countered and then you countered back and the bank has not responded to your counter yet. Is that correct I am not clear on what the 3% Ameridream gift is and why your recent counter is for 6% seller concessions. Without knowing what the terms of your original offer and the bank's counter-offer were, it's difficult to understand how all this fits together. However, it sounds like you just want to know if it is normal that the bank takes such a long time to respond to your counter-offer. Given the fact that they responded promptly to your initial offer, I would have expected a faster response to your counter. I am wondering what the listing agent has to say about this. Most likely the bank's agent has had prior dealings with this bank and would know if this is unusual. While banks many times operate on their own schedule, I would think that two weeks is unusual even for a bank. I would not be so concerned if this were a short sale (not yet owned by the bank), but since the bank is already the owner, the long delay does appear unusual. How much response time did you give the bank in your counter-offer? I would suggest your agent contact the bank's agent and inquire and request a status update. It is possible that the bank for some reason did not receive the counter-offer or misplaced it. They have a lot of work to do these days. Good luck.
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0 votes Thank Flag Link Thu Sep 27, 2007
Ute Ferdig -…, Real Estate Pro in New Castle, DE
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