Home Buying in Shepherdstown>Question Details

Tondalyn, Home Buyer in Shepherdstown, WV

I put an offer of $225k on an REO home with an asking price of $244,900. The bank countered with $244k and they covered closing costs. We accepted.

Asked by Tondalyn, Shepherdstown, WV Fri Mar 5, 2010

This all happened with 48 hours.We answered on the counter offer within minutes. Literally. Now, another offer has been submitted to the bank right before we accepted the offer (suposedly) and now the bank is considering both offers, asking us if we would like to sweeten the pot. I forgot what they called it, but they are giving us an opportunity to make our offer stronger just in case the other offer is stronger than ours. Of course they won't tell us any details of the other offer. This seems unethical. It feels like the bait and hook. I thought if we accepted the counter offer, then thats it...done deal. But no. 24 hours after accepting the bank's counter offer, we still don't know if we will lose the house to another offeror. FYI...we didn't sweeten the pot....we may just let this one go.

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Unfortunately, it would be unethical on lender's part if the other offer amount was revelead to either party--it's assumable the lender asked both parties for their final and best offer--do keep in mind the bank(s) are looking to make as much money back as possible--and unfortunately until there is an executed contract in place (signed by all parties) and deposit money exchanged anything can happen. Your agent can best advise you.
1 vote Thank Flag Link Fri Mar 5, 2010
Although some might assert that the banks aren't playing fairly, the banks are at least following the law as interpreted by their teams of attorneys. You have a few different choices: 1) reject their offer (and buy another property from a non-bank owner), 2) accept their offer unmodified, or 3) counter with the terms that you want. Most likely, if you accepted their purchase agreement without any modifications, then you--unwittingly--agreed to allow them to continue to market that property while it's still under contract (via a clause contained in many bank addenda). I hope your agent pointed that out to you, and I hope s/he also informed you that you didn't necessarily have to accept that clause. However, some banks will try to strongly coerce you to accept it, and others won't.

I think it's great that you stood your ground, and hopefully your deal will work out in your favor.
0 votes Thank Flag Link Sat Mar 6, 2010
Unfortunately this is the world of foreclosures. They called for your "best and final offer". As much as we do not like how sometimes this is handled, their job is to get the best they can get for the property. The agent legally and ethically must present all offers, and if there was not final agreement in writing, the lender has the right and obligation to look at all of them. Foreclosures ae priced very well these days, a good many are getting multiple offers. You most likely will go through this several times before you are the "winner". Basically, the banks are driving the bus, and you have to pay the fare to ride. Remember that there is no emotion on the other side, do not let ego get in the way of buying a home you want, look at the difference in cost and if it makes sense, do it. This is a great time to buy, low prices and low rates. Once it starts to change, it will change fast, you will not even have time to react. Don't take it personal, it is not, it is business. Remember you are looking to buy a home for you and your family, not shopping for a good deal.
0 votes Thank Flag Link Sat Mar 6, 2010
Welcome to the new world of real estate. It reminds me of the Twilight Zone. Not everything is as it seems to be.

You submitted an offer, you got a counter from the seller and you accepted it. You thought you had an agreement but the seller says differently. What can you do? I suppose you can see an attorney to enforce your rights…if you are right. But attorneys cost money. In your case, it may be more economical to offer a higher price for the house than to pay an attorney to bring an action that may or may not be settled in your favor. If you make a higher offer and you get the house you get the added benefit of getting the house. I know that sounds like I am repeating myself but isn’t that what you want…to get the house? It would be nice to get it for less but that doesn’t sound like that is going to happen.

Many buyers in our area are challenged by situations similar to yours. Even when the situation is not similar to yours, they are challenged. It is a strong seller’s market when it comes to REOs in our area.

Good luck. I hope you get a house that is right for you…whether it is this one or another one.
0 votes Thank Flag Link Fri Mar 5, 2010
Technically, yes, you have a valid contract. Once your agent presented your signed counter offer back to the seller (the bank) you have a valid contract and are in escrow, however, you need to repeat this to yourself..."banks don't play fair". I'm just letting you know what I tell all of my clients when we get started with foreclosures or short sales. Banks don't play fair. I'm sorry that you are going through this, but just be patient. Hopefully you'll end up with the home in the end and it will all be worth it.

BTW, the 1% is your earnest money deposit. It will be applied toward your down payment once you are in escrow.
0 votes Thank Flag Link Fri Mar 5, 2010
Does the 1% down in the form of a check made out to the listing agent count as a down payment? Of course I didn't ask, nor do I expect them to divulge any information on the other offer. My question is this: What is the point of the bank submitting a counter offer to us...we accept it...but they don't make a decision? Why is that ok? Am I wrong in assuming that the contract my agent and myself wrote up, signed and was ammended to reflect the bank's counteroffer (and signed by me), was a binding contract?
Why can't I put out multiple offers on mutliple houses, yet the bank can send out multiple counter offers to multiple people?
It doesn't make sense. Can someone please educate me. My agent acts as if he's dumbfounded by it as well.
0 votes Thank Flag Link Fri Mar 5, 2010
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