Home Buying in Titusville>Question Details

Snika, Home Buyer in Titusville, FL

On foreclosed homes and foreclosures, why is the buyers bid not sealed. It seems like a bad coincidence that most are won by the listing agent/office

Asked by Snika, Titusville, FL Sat Aug 11, 2012

unethical real estate transactions

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Scott Godzyk’s answer
With most bank owned homes if there is more than 1 offer, the bank will come back and ask for your highest and best offer where you can up your price or improve your chances by eliminating contingincies. Contingincies and home inspections doom more offers than price does. An offer with a lower price and no contingincies is better than a higher offer with an inspection or other contingincies..
0 votes Thank Flag Link Sat Aug 11, 2012
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As a Florida Mortgage Broker, I've seen it all!

When dealing with the Gate Guard (i.e. listing agent) , I've seen and heard, more often than not, about them ...."Sand Bagging"...the offers getting thru to the seller in effort to grab the entire 6% in realtor points!

Seems this unethical behavior happens all the time. This why many buyers, in addition to submitting their offer thru their buyer's agent, will Fedex or Certify mail their offer, their pre-approval letter and escrow letter directly to the seller with their contact info asking them to contact them directly

Or if a re-sale, some will simply circumvent the gate guard and go knock on the door after 6:00 pm. to meet the sellers personally and deliver their offer to them in person.

Being able to Grab that entire 6% realtor points (Ex: $300,000 x 6% = $18,000) can make some do things that they would normally say is unethical when others do the same.

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0 votes Thank Flag Link Sat Aug 11, 2012
There have been some moves forward with bank owned homes, which is a better term than foreclosed homes since that process is long over, where they require an online offer system. This system requires all offers to be made online which prevents the listing agent and their company from hiding, ignoring or showing favoritism to their offers. One such company is http://www.offersubmission.com/ and Fannie Mae has switched to online offers as well. This problem is no different than any offer made to a seller, it does not make a difference if it is a bank owned REO or one sold by Mr & Mrs Jones. In the old days an agent requested a meeting with the sellers to present the offer so they knew it was presented. I recall sitting in the living room with 3 other agents and being called in to the kitchen to make my presentation once. Today we email them to a listing agent who sends them to the sellers Iphone. 80% of my sellers here live in other states so I never see a seller if I am the buyers agent.
0 votes Thank Flag Link Sat Aug 11, 2012
Actually, I suspect that the open bidding limits the insider behavior on foreclosures. At least this way, you know you lost out because of price or conditions, whereas sealed bids means that they can go with a lower price and no one can ask why.
0 votes Thank Flag Link Sat Aug 11, 2012
The system and procedures may appear flawed; and it does seem that it's not what you know, but who.
Nevertheless, you have to believe that, for one reason or another, the property you were bidding on was not meant to be.
Eventually you will win the right one.
0 votes Thank Flag Link Sat Aug 11, 2012
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