You can give the agent a verbal counter offer however it is not binding. Most of the time the banks will go witht he best and final offer subject to written approval by a senior underwriter. What this means is if they like your offer the deal will stick. If something better comes along for them, you're out of luck. We've had one deal fall apart last year the week of closing because a senior underwriter did not like the terms. Put your counter offer in writing to be safe.

This is common. It sounds as if they have multiple offers and are trying to recover as much money as they can on the REO sale. Evidently something the local market supports through its buyer activity.

There are locations in whiich many REO offers are consistantly above the asking price. It sounds like you found one........

Good luck

I am an REO listing agent in Nevada. List price is just a suggestion.....buyers can offer less ( and LOVE to lowball the banks) and sellers can accept more. If you really want the house have your agent help you determin market value and base your offer price on that. I would even suggest you offering a very high price to insure your offer IS the highest and best unless you are paying cash. Your lender will require an appraisal and if it comes in lower than the accepted offer, the banks will adjust the purchase price to match the appraisal. If they don't you can get out of the contract based on your financing contingency and the banks will have to lower the price or accept cash only offers in the future. They would rather go with an offer they have on the table...especially in a declining market...(and asset mgrs. work on bonuses....they get a bonus based on closed transactions in a month and make NO money if the transaction doesn't close). Despite what agents are saying here...there are no games....the banks and asset mgr.s and listing agents want these assets OFF the books. Listing agents incur several thousands of dollars in expenses on each listing (utitlites, clean up etc...are all expenses paid for by the listing agent) I personally carry about $100k every month. The longer you hold a property in your inventory, the more money it costs.
My advice is to not be greedy and make a fair and clean offer. Ther banks are already losing so much money on each property..yet I see so many pathethic low ball offers. AND I see so many pathethic offers written by agents who think they are going to tell the banks their business...they ask for the moon on top of lowballing. repairs....closing costs, paid appraisals, contingencies.....PLEASE!
Also I would suggest closing escrow 45-60 days out (on or before) so you (buyers fault) don't get hit up wth a per diem if you have a probelm closing on time.
Also, there are so many different laws in real estate and contracts vary from state to state, the bank addendum is THEIR contract.; it's easier for them to have one contract they know than it is to have to try to sift through pages and pages of unfamiliar contracts....terms and conditions accepted will be included in their addendum...it's not to be deceitful.....READ what you are signing....just a good idea in general to READ and understand BEFORE YOU SIGN anything.
Also one thing to remember is that Buyers are emotional.....REO sellers are NOT they have no attachment to the property other than the numbers having to make sense. In that sense, they don't care. So make a clean straight forward offer. I sell them all day long...the market in Las Vegas where I work is HOT....you can find great bargains all day long. Good luck.

Glenn:

It is my understanding that a real estate contract, to be binding, must be in writing (check with an attorney on this). That being said, it is not unusual for an REO listing agent to allow your highest and best offer to be verbal, to expedite matters. They are just inputting the information into the bank's computerized REO system anyway, until the bank accepts your offier. I would, however, be careful, since the banks like to bend the rules alot, they could consider your verbal price a binding contract and if you change your mind then you will most probably really need an attorney at that time.

I have had clients who were willing to submit their highest and best verbally. If the offer is accepted the bank will require a signed addendum to the purchase contract, and then they will also require that you sign their addendum which incorporates the terms they like and leaves the rest out, and states that their addendum superceeds all other signed documents. It is a funny game the banks are playing and until the realtors, buyers and attorneys put their foot down, they will continue to play the game to their advantage.

Consult with your realtor and follow their advice. If they are unwilling to advise you, consult with an attorney. And if you really like the property and believe you are getting a good deal, maybe you want to do a verbal to stay in the running. I had a client submit their original bid as their highest and best and get the property because everyone else backed out. I have also had clients increase their bid and get overbid and lose the house. They say its a buyers market, but it sure acts like a sellers market in the REO world.

Best of luck in finding your perfect home and getting a great deal. And Dare to Dream

Shel-lee Davis
Real Estate Consultant
RE/MAX Palos Verdes Realty

Hi there Glenn. Yes but you need to submit in writing. Most offers come in over the REO price. So imagine an auction. This is what REO' s are like.

Work with your agent to foind out how much equity is in the home, try to fins out how many offers ans what you need to come in at to be in the running

Good Luck
Michael Barron
First Team Real Estate
(714) 552-6817
michael-barron@sbcglobal.net

Yes it is bidding war. All of our clients based on home value pay over the REO list price just to secure the property if it has equity.
http://www.lynn911.com

An offer should never be verbal, it is not a valid offer. However it is common for banks to come back asking for "highest and best" , even in situations where there is only one offer on the table.