Banks typically do require a buyer to be prequalified through that bank in order to ensure the buyer is truly qualified to purchase. Banks, like most everyone else in the sales process, recognize that preapproval or prequalification letters are only slightly less useful than toilet paper...in other words, they're essentially meaningless most of the time. So banks will want to know for themselves that you have the horsepower to complete the purchase. Is if fair? That's open to individual opinion, but I say yes. It's the very reason I no longer personally bid on bank properties...I don't wish to follow their rules.
Bottom line is this. Any seller can choose any offer, even offers that appear to be lesser offers.
Thank you nick.
Disclaimer: I am a licensed real estate broker and property/casualty insurance agent in the State of Ohio, providing information and sharing experiences acquired over 15 years in the industries. I do not profess to be qualified to give advice in any other field, though will share opinions and information obtained during my course of work. It is always highly recommended that consumers seek counsel from a specialist in each area in which there is a question or concern.
Some banks may not care who your lender is.
Banks work in their own world anyone wanting purchase a foreclosure anticipate drama. Many Realtors prefer not work with short sale or foreclosure do to allllll particulars involved.
Best of luck
National Featured Realtor and Consultant, Texas Mortgage Loan Officer, Credit Repair Lecturer
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He had 2 offers for his home, one that was higher than the other. But there were advantages to the other offer that made it a better deal for him. The winning buyer was willing to buy without a home inspection, and close sooner than the higher bid. That was worth money in the bank to my son, because he could save time and money with a quicker closing.
It's not always about the money.
If I were you, I would go ahead and get your pre-approval from the foreclosed home's bank. It permits the bank to take a look at your finances and see that you are a good candidate for their own mortgage standards.
Oh, and incidentally, if you use their bank for your mortgage you can sometimes get them to contribute to your closing costs. The banks want to keep the loan as much as they want to get rid of the asset.