Home Buying in 92648>Question Details

M, Home Buyer in hb

My offer was accepted on a REO property. Can the bank back out of the offer?

Asked by M, hb Sun Jul 13, 2008

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14
Hi M,

We bought an REO a few months ago and the addendum stated that the bank could revoke it at any time prior to close of escrow. The bank did have a back up offer come in $20K higher than our agreed upon price, so we were worried that they would decide to take the back up over our signed offer. They followed through on the agreement with us and I think it's because of bird in the hand.... we scheduled the inspection at the earliest date possible, where as the back up offer could go ahead and change their mind and put the bank right back where they were.... trying to unload a non performing asset that is losing value by the minute.
2 votes Thank Flag Link Mon Jul 14, 2008
The banks have an addendum that allows them to cancel the transaction for any reason because they want to put pressure on the buyer to perform. This gives them an out if they feel the transaction will not close. Remeber, time is money to the banks. They want to close this quickly. The last thing they want to do is start over with somebody else, unless they are concerned the buyer and agent are not performing. Communication is key right now. Good luck.
Web Reference: http://www.LehmanHomes.net
1 vote Thank Flag Link Tue Jul 15, 2008
Hello "M": First, congratulations on your purchase, and I have to agree with Jeremy. Second, stay in close contact with your agent and your lender until keys are in hand! Good luck and I wish you the best.
Web Reference: http://www.DebraEnos.com
1 vote Thank Flag Link Mon Jul 14, 2008
Positively, at any time. The bank is not a non-profit organization and they are going to protect their own interests to a fault. I have seen counter offers from banks that are simply ludacrious and insulting.
0 votes Thank Flag Link Fri Aug 15, 2008
It's not that they are backing out of the offer, they are simply looking and waiting for the highest and best offer. They have already lost money on this deal and they are in business to make money, they are not in business to sell homes. Sometimes an all cash deal is not the best offer in the banks opinion. They may want someone who's a strong buyer - with a decent down payment but who will still finance, so that they continue to have business and hopefully future business with that person. It's hard to say exactly why they are stalling, but this would be my opinion. If I can be of assistance to you in the Laguna, Dana Point, Aliso area, just let me know! Cynthia
0 votes Thank Flag Link Thu Jul 24, 2008
I asked this original question.

The offer was verbally accepted by the bank. The bank sent over all of the necessary documents to sign which I did. When I signed the documents I also had a $10,000 deposit which was submitted. The agent I was working with assured me that the final documents were being signed by WAMU and would be back shortly. Today I received a call from the agent saying that the bank had decided to put the property back on the market and accept offers for another week. I'm trying to understand what happened here? This was an all cash deal with a 15 day escrow, all contingencies waived.
0 votes Thank Flag Link Wed Jul 23, 2008
As an REO professional I can safely say the addenda likely states they can walk away or change their mind at any time. Frankly it's unlikely they will unless you've given them a reason to pause. They want to sell and you want to buy. They're not out to get anyone, they're just protecting what's left of our banking system. You do your part, they’ll likely do theirs.
0 votes Thank Flag Link Tue Jul 22, 2008
I agree with Jeremy. There is often a way out of the transaction, and the addendums required by the bank can be somewhat draconian. That said, the bank would really like the sale to close quickly. Make sure that your agent is on top of things, communicating with the listing agent and making sure everything moves forward as quickly as possible.
Web Reference: http://www.donovanblatt.com
0 votes Thank Flag Link Tue Jul 22, 2008
Do you want to back out? Do you have an agent representing you?

Write me for confidential advice at vivian@campbellrealtors.com
0 votes Thank Flag Link Mon Jul 14, 2008
Hi M,

Have you signed the papers that the bank sent through your agent? Have you opened escrow? If you did, it will be very tough for the bank to back out.
Laarni
0 votes Thank Flag Link Sun Jul 13, 2008
This was an all cash deal with proof of funds.

The reason I'm asking if they can pull is because I'm worried that the bank may accept a higher offer. I've read that with REO properties even if an offer has been accepted they can go for something higher.
0 votes Thank Flag Link Sun Jul 13, 2008
Could depend on what bank addendums you signed. As part of the transaction, the bank may have an addendum stating that the bank has the right to change their mind and walk away at any time prior to close of escrow with no penalty.
0 votes Thank Flag Link Sun Jul 13, 2008
HI M,

Usually not. The bank usually performs if you did your due diligence. especially the requirement of a cashier's check. Please ask your agent why the bank will back out if they have already accepted?? Hmmm, I wonder.
Thanks,
Laarni
0 votes Thank Flag Link Sun Jul 13, 2008
There is always a way to get out of a transaction, but if you perform on your end, there shouldn't be any issues. Make sure your agent is on top of the transaction at all times and meets all the deadlines. Keep in contact with your agent, and don't delay if information is requested by your lender, escrow, or the bank.
Web Reference: http://www.LehmanHomes.net
0 votes Thank Flag Link Sun Jul 13, 2008
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