Hi there Allen. This does not sound too strange. Welcome to the World of Buying REO's.
Banks are acting erratically lately when it comes to their REO Inventory
Kind Regards
Michael Barron

Sat May 17 2008, 13:56

Banks don’t like deals filled with lots of inspections or credits. The other offer might have been a cash offer with minimal inspections that they used to get out of the contract. You might want to re-submit your offer and see if they take it this time. I would not include any credits just place the offer price where you want it.

You could have an inspector go through the property first and then make the offer without any inspections.

Sat May 17 2008, 08:45

Allen your Realtor is in all likely hood doing a good job for you. The REO's have suddenly become so popular since people have a perception of getting a "good" deal. There are sometimes more than 50 offers on these properties and the response from the bank is VERY slow and tedious! Sometimes a buyer qualifies and has credentials saying so and then they do something off the wall like going out and buying furniture or a car before the property closes thereby destroying the FICO #'s established to get the home loan (the loan institutions always rerun credit just before close) and then do not qualify for the loan. So I guess in closing I just want to say please don't feel your Realtor has done you a disservice until you really know that.

Sat May 17 2008, 08:44

Allen: It is not unusual for an REO bank to call for highest and best, and accept the highest and best based on $$$ alone. Often, when the bank presents their addendum, which attempts to absolves them of liability for everything including their own acts, the buyer decides not to buy. Or perhaps, the highest and best buyer determines, after inspections, that they have offerred too much and bank will not make repairs. Lots of reasons for an REO deal to fall out. (I have a client who has been overbid 4 times on the same REO. Each time it goes into escrow and 1 to 3 weeks later falls out.) So this could very well be just the normal progression of an REO deal. They are not as straight forward and easy as most people believe they should be.

On the other hand, your buyer's agent may have a conflict of interest. You might want to have a talk with them about that, and if you are still uncomfortable with the situation, you might want to change agents.

Sat May 17 2008, 08:44