Wayne gave you a spot on assessment of what an Agent should do, and why banks can be irrational.
My only point to add is why haven't you checked out other lenders I ALWAYS recommend my buyers check out (3) lenders and let them KNOW you are doing that, this way they work to give you the best deal they can.
The agent is required to present every offer to the seller up until close of escrow, even if there is an accepted offer already. The Seller is not required to consider the offer, but must be informed.
In your posting you were not exact as to when you made the offer, but you indicated in your answer that it was only submitted to the Seller yesterday. It should normally be submitted to the Seller within a reasonable time frame from when you made the offer (i.e., if you submit an offer Friday afternoon to an institutional seller it would be reasonable to expect them to be made aware of the offer at least by some time on Monday). Normally the Realtor representing you would follow up with the listing agent in an effort to encourage submission to the Seller as quickly as possible.
In you offer, you will have indicated a time frame for which the offer was valid - has that expired? They may still reply to that offer after the time frame but you would normally want it replied to before expiration.
With respect to the listing agent being 'difficult to work with' ... that is one of the reasons you have someone representing you who is used to dealing with a variety of other agents. Sometimes a listing agent has many listings (I know one who has 93 REO listings) and so becomes a little mechanical in their management of their inventory. They sometimes get many offers, some ridiculously below asking, and are obliged to submit every one. Recently I inquired about an REO listing where the listing agent was submitting 17 offers for a variety of properties in one day.
With respect to banks being 'irrational' - I've seen one department of a bank accept an offer while another department proceeded with foreclosure, and the buyer eventually buying the property after foreclosure for $100,000 less than what they had been willing to pay. I've seen banks refuse to negotiate because no one wants to take the responsibility. And I've seen them overwhelmed by paper work - losing paperwork - and just reacting to the latest phone call rather than being proactive. They have difficulty ascertaining what is a fair offer or not and rely heavily on process rather than judgement to make decisions. They will sometims refuse to sign documents even though they are prepared to make a deal. They're having tough times.
Work with your Realtor to overcome the obstacles - realize these obstacles are one of many reasons that REO listings are normally 'below market' - and don't put all your eggs in this basket: Keep looking and don't hesitate to put in an offer on another property if it seems desirable.
With respect to loans, without knowing the property and your circumstances it is difficult to be precise, but even in today's market there are a variety of loan programs available. 80% loan to value are common in mid-range priced properties, and FHA loans can go up to 97%.
Good luck ... Wayne
Thank you for your replies. I have to put 50% down payment (Cash, CDâ€™s and bank funds) because my bank decided to cover 50% of the purchase price. I have been a member of this bank for 32 years and they are not that large of a bank. They primarily cater to the Asian community of the bay area and in my experience, the bank never gives you 100% of the asking loan. That is why I believe they would only cover 50%, they are not a big bank but they do come through because I have had previous home loans with this bank. My offer is not that low, above asking price yet it was submitted just yesterday. Are there very few programs out there for a home like this? I ask because if so I wonder if that gives me an advantage. Also, the listing agent is a real hard person to work with. Is he absolutely required to submit every back up offer to the bank?
And, what does it mean that banks do not act rationally in this market?
Thank you again, Allyson and Wayne.
A 50% down payment may make you stand out depending on the reason for the high down payment and your source of funds.
REO's are often priced below market because banks will not consider inspections, repairs, and will normally have never even visited the property they own. They just want to get rid of it. If they first offer was unable to perform, I'm surprised they would not have immediately gone to a back up offer unless there was a significant difference in price or terms
BTW ... Banks do not act rationally in this market ... do not expect that
My name is Allyson, I do specialize in bank owned (foreclosed) and short sales properties. I'm not a lending expert but I know of no programs that would cover that amount, most lending programs are to assist low end first time home buyers. To answer the 2nd part of your question YES banks really like a big down payment. My only concern is you could only get a loan for 1/2 of the amount? is there something wrong with the property? the area? The big down payment will definitely help you against other offers ( as long as you aren't to low, if you are to low this could be why they haven't given the other buyer a "notice to perform" and cancelled the other contract and gone with yours) as the banks want a smooth and ON time escrow and the down payment shows them that you are a serious buyer and you should have no problem getting a loan.
If you any addtional questions please feel free to email or call.