This is David Reed, I wrote this question. Thank you for the responses.

I don't buy the "overworked asset manager" theory as contributing to delays.. to me, growth in the number foreclosure assets at a bank should speed things up. Everybody is busy. Seems to me that the transaction is pretty straightforward. The bank has actively listed a property for which it has a valid market-price appraisal. The listing price may be reduced somewhat from comps to account for distress, but that doesn't matter. So they have an active listing along with a valid market price - why take on the additional work of reviewing all of these offers? Just accept the first reasonable offer and move on.

I personally experienced SEVERAL instances where an active listing had been receiving offers for weeks; and had reduced the listing price periodically despite multiple offers! Of course many offers will be low-balled, but all the advice I read here and elsewhere indicates that realtors recommend that you "make your best offer first" - surely some of these offers are a result of that advice! Comments?
with a history of price reductions was, upon

David,

The answer that Jessica gave you first is correct. You can determine how long you are willing to wait to get an answer on your offer. I can tell you from experience, that banks are holding offers in order to get a better offer which I feel is just wrong. Most banks are looking for quick settlements (within no longer than 45 days if you are getting a mortgage) and a lot of times accept cash offers that can settle within 2 weeks or less. So, if you are obtaining a mortgage, you need to put in your highest and best offer to begin with. I am sure that your agent had talked with you about this process.

The properties are for sale, but the banks are also trying to get as much money as they can for these properties since they have already lost money in this process. Also, banks are very stressed now and are under staffed in most cases. So, working with an asset manager that has a few hundred files on their desk may be the case and why you are not getting a quick response. Be patient and put an expiration date for acceptance in your contract. That should help.

Also, this is such a great market and there are so many homes available. You should be previewing any and all homes that are in your price range. You might be shocked to find that buying directly from a motivated seller is much easier than trying to purchase a foreclosure property through a bank.

Good luck to you!

David,

It sounds like your agent is correct regarding the approach you should take. Unfortunately, when you are making an offer to a third-party (such as a bank) and waiting on their response, you are really at their mercy. One of the biggest reasons for the delay between the time that an offer is submitted and the time it takes to get a response is becasue the asset managers at these banks, lenders, etc. have such a large back-log of offers that they need to review. The banks are not adequately equipped to handle this large volume of foreclosures / short sales and, in all honesty, is really causing more damage to the already fragile situation that the market is in.

To answer your question, you could always try putting a time limit in your offer that says something along the lines of "if you do not receive a response within "x" amount of time that your offer is null and void". However, I don't think you will get very far with that when dealing with the third-party.

My only other advice would be to not limit yourself to looking only at foreclosures / short-sales. There are a lot of good buying opportunities out there right now and you may find that you can get just as good of a deal purchasing a resale from an individual owner without all the hassles of dealing with a foreclosure.

Best of luck to you.

Dennis Skelly
Ricker Realty

Good question. I have found that you can get an answer in less than a week on most foreclosure properties. No communication from the bank or their agent is unacceptable and your Realtor should be in charge of getting updates by phone or e-mail to keep you informed. If you don't get an answer within one week (or the time you see fit) you may withdraw your offer at any time prior to it's acceptance and make a move on another home. You really drive the time line process on how long you are willing to wait. Wondering if maybe some of these are short sales? If that is the case those can to 4 - 6 weeks for a response. Best of luck on your home search!