Home Buying in Carson Park>Question Details

Lisa, Both Buyer and Seller in Long Beach, CA

Hello,My husband and I are currently selling our home in Long Beach CA - it is in escrow- and we are

Asked by Lisa, Long Beach, CA Fri May 30, 2008

in
the process of finding another home to purchase. The realtor we are working with will not show us any bank-owned properties because she claims banks will not accept an offer with a contingency. The contingency we are submitting protects us if the buyer of our house backs out of the offer, does not obtain funding, or escrow does not close for whatever other reason. We don't feel this will happen but if it does we have the option to back out of an offer we have made if we have to. Is this typically true of REO's - will banks not consider a contingency like that?
I feel we are missing many housing possibilities because we cannot consider the REO's. Thank you

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13
Benny,

Did you notice that this question is one year old? I'm gonna guess they got this issue resolved and aren't going to have to rely on your keen expertise. You also just answered someone's August 2008 question about home values by the end of 2008.

You're just making your self look bad dude.
1 vote Thank Flag Link Wed May 27, 2009
Hi Lisa,
I can see why she's not recommeding you to place an offer contingent upon closing your existing home. Banks wants to deal to close as soon as possible and they don't want to wait until your property closes. My suggestion is to wait until the closing of your home is finished and start looking for another house.

Call me if you need assistance - Charita King 562-276-8681
1 vote Thank Flag Link Fri May 30, 2008
Here's the part where I feel fabulous to work for Prudential. We have various programs for various scenarios. The most common the one you are mentioning here. In the event your buyer backs out and you are in escrow on the purchase of your new home, Prudential will help complete the purchase and then continue to market your property till it sells. To learn more visit my website or contact me directly.
Web Reference: http://bennychavez.com
0 votes Thank Flag Link Wed May 27, 2009
There's no doubt that banks like offers with no contingencies, who wouldn't? Your requests are valid and reasonable and do not affect the deal unless the seller screws up. Problem is, you're potentially up against other offers than don't have any contingencies at all. You're agent probably doesn't think it's worth the time to submit your offer. However, his generalization about banks not accepting offers with contingencies is overstated. Banks take what they consider to be the best offer, period. But they will consider all offers if they're doing their jobs correctly. My advise? Once you've been pre-approved, done your d/d and are certain you want to purchase a particualr property, include the contingencies but offer a token amount, say $5000, non-refundable upon signing. That should at least get their atttention enough to look twice at your offer. It means that if you don't perform, you lose your money, so make sure you have your ducks lined up. It also tells the lender you are serious about closing and that may put you at the top of the stack (assuming all other terms were in line with the other offers). It's worked for me. Good luck.
0 votes Thank Flag Link Wed Jun 11, 2008
RE: REO's - There are indeed a lot of Bank REPO's and they would like a quick clean guarantee to close offer. Perhaps your agent can still place an offer if you and your buyer(s) are willing to show all the escrow documents and lender approval, appraisal's, verification of their income, etc.... to make them feel comfortable to even consider a contingency sale. Another option is too see if your buyer is willing to rent back to you approx. 15-20 days to be able to close on the bank repo - this way you can remove that contingency on Selling Your Home.
Lesley Harris, realtor
(562) 673-0943 cell
(714) 594-4149 ofc.
0 votes Thank Flag Link Tue Jun 10, 2008
Lisa, It sounds like your agent is trying to protect you from a difficult situation. Like the others here have said there is no set rule with the banks about accepting contingent offers, however, the banks are mostly accepting offers that will close the fastest and net them the most return. If you are going to search REO properties you will likely have a very difficult time actually getting a contingent offer accepted. Your best scenario would be a REO that has been on the market for a while and has no offers. Unfortunately these are not usually the most desirable purchases. Wish you the best of luck in your home sale and search.
0 votes Thank Flag Link Sun Jun 8, 2008
The bank can accept whatever offer they want. However, if the bank recieves multiple offers and your offer has a contingency and the competing offers do not have contingencies, most likely the bank will refuse your offer.

Also, your agent maybe trying to save you from unnecessary confusion. Some banks are very slow to respond. And when I mean slow, they can take their sweet time in responding to your offer.

If you are selling and don't know whether or not the bank will accept your offer, can you see how that screws everything up and only causes you more confusion than necessary???


Good luck.
0 votes Thank Flag Link Wed Jun 4, 2008
Hi Lisa:

The banks will take offers with contingencies. However, once they accepted the offer, along with the acceptance, they will request that you close the house within a certain period of time, otherwise, the deal is off.

Yes, your agent should show you all houses that fit your criteria, REO or not, and let you decide whether you can accept the terms and conditions of the specific house you might be interested in. That's where the negotiation comes in. If the bank for that specific won't accept the contingency you have in mind, than that's when you go on to the next property, not before.

My theory is, if you don't try it or don't ask for it, you will never know if you can get it or not.

Sylvia
0 votes Thank Flag Link Fri May 30, 2008
Sylvia Barry,…, Real Estate Pro in Novato, CA
MVP'08
Contact
Hi Lisa,

You should be able to check out REO properties. I am an REO listing agent and have not seen any memo from the banks stopping anyone with sales contingency. I agree with you, you are missing out because 25 to 30 % of current listings in your area are either REO or short sales and your agent should exercise her agency relationship,ie. your wishes are law unless you are asking her to do something illegal. I feel bad for you but I wish you the BEST.
Laarni
0 votes Thank Flag Link Fri May 30, 2008
I can see your agent's point, but each transaction is different. If you were my client, I'd show you REO's but would also warn you that it doesn't really matter what you and the seller agree to--The ultimate decision of whether to accept your offer is made by the lienholder(s). I'd also warn you that even if a bank did accept your contingent offer, they would immediately bump you if any other acceptable non-contingent offers came in, possibly negating the usefulness of presenting a contingent offer in the first place, depending on the timelines involved. An additional consideration is that short sales can take months just to get the lienholders to accept an offer. (I'm the listing agent on a REO and we had mutual acceptance in February. Still waiting for the lienholder to approve it). Do you think your current house will sell in 3 months? You might not even need to make a contingent offer.
0 votes Thank Flag Link Fri May 30, 2008
Lisa, The agent is working for you. If the agent doesn't do what you direct them to, fire them and get another agent. This agent could be correct but it doesn't matter. After giving you all the information she has available, if you direct her to submit an offer on a REO property with the contingency she should do it.
Sometimes people think they are helping you when they have actually lost sight of what an agent is.
We do everything we can to get you what you want. In doing that the real test is in trust between you and your agent. She might be absolutely correct that most banks won't accept offers with sale of home contingencies but I bet that for the right amount of consideration from you to the bank they might.
The most important thing to remeber is that you are the principle and she is your agent.
0 votes Thank Flag Link Fri May 30, 2008
Jed Lane, Real Estate Pro in San Francisco, CA
MVP'08
Contact
Lisa:

Unless your agent speaks with the listing agent, there is no way to determine what the seller will, or won't take with certainty. I can understand your agent advising you against viewing and offering on properties where the listing agent has clearly stated their owner will not consider a contingent offer. This would hold true for any seller, bank or indvidual, some will and some won't accept a contingent offer. There are, however, many factors to consider, such as:
- How close are you to having contingencies removed on the sale of your home
- Are you the only offer on the REO home
- How long has the REO property been on the market without offers
- How close is your offer to asking price

If you are truly interested in some of the properties on the market that are REO, have you considered some other options for opening your buying possibilities to these properties. Can you stay in your home on a lease back for a couple of months after closing? Can you make a temporary move into an apartment after closing and shop for homes at that time?

If you are finding that none of the non-REO homes meet your needs, perhaps an alternative solution, like those suggested above, would benefit you in the long run.

Good luck in finding the perfect home & Dare To Dream.

Shel-lee Davis
Real Estate Consultant
RE/MAX Palos Verdes Realty
0 votes Thank Flag Link Fri May 30, 2008
Did you ask your Realtor to ask the listing agent of the REO property if his/her client would accept a contingent offer?
0 votes Thank Flag Link Fri May 30, 2008
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