Foreclosure in Tennessee>Question Details

Tim, Home Buyer in Tennessee

we placed a bid of asking price for a forclosure and signed bid with an end date of 6/26. They are now asking

Asked by Tim, Tennessee Wed Jul 9, 2008

us to come in this am and resign bid paperwork since they now have other offers. Would this be due to the past date since the morgatage company person was on vacation? Or do they want us t osign again since the commitment contract has expired? I don't want to get into a bidding war. Any advice before we go in and sign again at 0900

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It sounds like you put a time limit on them accepting your offer (until 6//26), is that correct? In a bank owned property situation, they rarely reply quickly to an offer. Two weeks is not unusual. Was the offer just signed by you? As it has been mentioned, having a realtor in this situation can help you a great deal. If you do have one, fabulous...they should be able to guide you through this meticulous process from this point on.

It sounds like they waited to receive other offers, but that yours has officially expired. You probably have the highest offer because few will offer asking price for a foreclosure unless they know there will be a bidding war or they know it is significantly undervalued at the listing price. So if yours was the highest, they want to make sure they can begin working yours again with a valid contract (not expired). In TN, banks have an understanding of our homes' market value, so most are pricing them along with the rest of the market (maybe slightly under) in hopes to still get market value or close to it. Since your offer has expired, I would take this time to re-evaluate the situation and gather more research. I'm sure you did plenty prior to the offer, but foreclosures are a different can't be too prepared. What is the home really worth as you look at recent comparable sales, the "true" condition of the property, the costs it will take to bring it back up to market value (if it is not already in tip top condition and completely updated). Since it will be in "as is" condition, do you have someone who can truly evaluate the property to see the things that might be easily missed? Then you have to consider many things like...who really owns the property now? Is it in short sale where the bank is accepting offers but it's really in pre-foreclosure with the previous owner? If it's in pre-foreclosure, how many liens are on the property and which loan is in foreclosure? If it's one of several loans, then is the most senior loan in foreclosure or is it a secondary one? That is VERY important to know. Are there any other liens on the property for property taxes, income taxes, etc.? If the bank owns it outright, that is one thing, but if it is in the process of being foreclosed on...without much careful research you could unexpectedly end up with responsibility for certain liens. You will not get title insurance in this case, so it is your responsibility to research the title.

If it is completely bank owned at this point, you will just have to know how to navigate through the hoops and know how to negotiate with them. I still recommend using a professional for this. They sell them as is, usually, so it needs to be a win/win for all, not just the bank. So price is where I would think the buyer has the most potential for a "win" out of the situation. How much did they acquire the property back for (what was the outstanding loan balance that was foreclosed?) How much is list over or under that? Compare that to market value using the last few months sales of comparable properties and see how much that is over or under that. How much $ work will be required, etc.? There are many more things, but I would start by making sure you have answers to some of the important questions (if some are unclear).
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1 vote Thank Flag Link Wed Jul 9, 2008
A bidding war it is the foreclosure market has begun to turn into a feeding frenzy for investors. In order to play in the foreclosure/short sale market, you have to be patient and learn to deal with the banks!!
0 votes Thank Flag Link Wed Jul 9, 2008
what did your Realtor tell you? .if your offer contract was accepted and the closing date was not extended your contract most likely expired and the process generally begins again .I do not think the mortgage reps being out of town had anything to do with it because most let others handle their files . It comes down to do you want the property ?if yes highest and best first.... its not really a bidding war with a bank its just highest and best first......... they will usually ask if others want to be held as a back up ....usually there is no second chance to bid with a bank that are looking at multiple offers.
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0 votes Thank Flag Link Wed Jul 9, 2008
Sounds as if they need you to resign since your commitment contract has expired. Did the bank ever respond to your first bid? If so, what was that response? Call your realtor and have them re-explain the reason for resigning and remind them you are not willing to get into a "bidding" war. I would advise that your bid should be your highest and best offer.
Good luck!
Tina Evans, Principal Broker
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0 votes Thank Flag Link Wed Jul 9, 2008
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