Foreclosure in San Jose>Question Details

Tom Ng, Home Buyer in San Jose, CA

lender still have the right to accept another an offer while we're doing inspection, is it true ?

Asked by Tom Ng, San Jose, CA Sun Aug 17, 2008

Help the community by answering this question:

Answers

4
Hi Tom,

Any seller, bank or individual, has the right to accept "back-up offers" at any time.

Banks on REO transactions often never provide the buyer with a signed acceptance.

In other cases banks provide a signed acceptance but have included an addendum that gives them the unilateral right to cancel the contract.

In either of these cases the buyer is at the mercy of the bank and may be faced with the choice of paying more money to beat a new competing offer or letting the house go.

Read your contract and verify whether you have a signed contract.

Good luck,

John Hickey
Dilbeck Realtors, GMAC
818-541-7311
John@JohnHickey.com
0 votes Thank Flag Link Sun Aug 17, 2008
Tom:

Have you seen the seller's addendum. Read it carefully with your agent. The terms of the addendum prevail over the contract.

Carol Ann Pease, ABR, CRB, CRS, e-PRO, GRI
0 votes Thank Flag Link Sun Aug 17, 2008
Hello Tom. The answer to your question depends on the terms of your contract. It is true that some banks make you sign an addendum that includes a provision that gives the bank the right to cancel the contract any time prior to the close of escrow. I personally wrote up an offer once on a bank owned property and the listing agent presented me with such an addendum that was required by the bank. While I did not like it that the addendum was so one-sided, I explained it to my client and he understood what the risk was (i.e., spend money on inspections and not get the house after all). The only good thing was that I knew the listing agent who had a very good reputation and I knew that she had sold hundreds of REOs and she told me that this particular client has never cancelled a contract. While I could not have done anything if the bank had cancelled the agreement despite of what the agent told me, it helped knowing the agent and knowing that she had dealt with this bank client on a regular basis. Thus, if your contract contains the bank's right to cancel, I would recommend that your agent find out from the listing agent whether the listing agent is dealing with this client on a regular basis (how many sales has the agent handled for this bank and did the bank ever exercise the right to cancel?). There's only so much you can do and there's no guarantee that your contract is not the first contract they'll cancel, but at least you'll know what the odds might be. Good luck to you.
0 votes Thank Flag Link Sun Aug 17, 2008
Ute Ferdig -…, Real Estate Pro in New Castle, DE
MVP'08
Contact
Sure, why not? It does not mean that they can cancel your contract for any reason.
0 votes Thank Flag Link Sun Aug 17, 2008
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2016 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer