Home Buying in Phoenix>Question Details

Rick, Both Buyer and Seller in Phoenix, AZ

What do you suggest in dealing with bank owned properties where they use offers as if it's an auction?

Asked by Rick, Phoenix, AZ Mon Oct 27, 2008

Recently submitted written offer thru a realtor for bank owned property. 2 days later they contacted realtor & he contacted me via phone & said, "Oh they've got 8 offers & 2 are for $80K cash. Do you want to raise your offer. I'm APPALLED that this is tolerated...THIS ISN"T AN AUCTION....how about a written counter offer allowing me to accept vs "USING" me & other buyers & my offer as leverage to drive the price higher....Comments anybody?

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9
Unfortunately that is how the majority of the banks operate at this time. They are simply trying to get the most money for their asset. It does not put the buyer in a good negotiating position, but it does the seller so therefore they go that route. If you do not want to accept this behavior I would suggest keeping your offer at your current offer price or withdrawing your offer and move on to a different property.
Web Reference: http://www.TeamKearney.com
2 votes Thank Flag Link Mon Oct 27, 2008
Unfortunately for some buyers this is what you are going to run into. Keep in mind though that you are still probably getting the house at a "bargain price." Lenders are taking a bath across the board and are going to do whatever they can to limit their losses... it's just business to them. I would suggest what some of the others have below and address with your agent whether it is still a good deal at the price they want. If so put in the bid, if not move on, there are tons of homes to choose from. I think I know what Brad is referring to when he says you can be the best offer every time. One of two bad things CAN happen with that scenario, either you can be under contract for a house at more than what you should pay for or the seller will just disqualify your offer due to the possibility of you just canceling if you don't like the price... Your best bet is to talk again to your agent and do your due diligence on the home(s) you are putting offers on.
1 vote Thank Flag Link Mon Oct 27, 2008
It can be very frustrating, dealing with bank owned properties. I know because my office has over 400 listings in the San Diego area at this time. That has been our average for this year.

Some bank properties are good deals and get multiple offers quickly and some get reduced significantly over the many months they sit on the market.

The listing agent, one or two other agents and sometimes an appraiser have given the bank their recommendation on the price they expect the property to sell for with a 30 day or less marketing program. The bank then decides the price. Some banks are intentionally pricing their properties 20% to 25% low so they can get just this exact scenario.

You must know the comparables sales data and the market in that specific area of your city when you make your offer!!! When the bank counters back, know your limits and stick to them, just like in a regular auction.

Banks (and any seller) has several ways to counter multiple offers.
1 counter each offer differently.
2 counter each offer the same.
3 counter the best offer.
4 counter all with "give us your best and final offer"
Then they can do any of the above again or just take the offer that is the best "price & terms" for the bank.

In California, it is legal to tell the buyers what the other offers are, if the listing agent has written permission of the seller.
1 vote Thank Flag Link Mon Oct 27, 2008
RICK
I BEEN DOWN THAT PATH. I USUALLY TRY TO GET A GOOD START WITH LISTING AGENT AND GET LOTS OF INFO. bEFORE MY CLIENT IS READY TO WRITE AN OFFER I TRY TO GET MORE DETAILS ABOUT THE PROPERTY. LENDER OWNED HOMES WORK A"LITTLE DIFFERENT" THAN WHAT WE ARE USED TO. DON'T GET DISCOURAGE, THERE ARE PLENTY OF INVENTORY TO CHOOSE FROM. SHORT SALES ARE ALSO A VERY GOOD AREA TO LOOK, BANKS NEED TO MOVE THEIR INVENTORY. REO SIDE IS MUCH DIFFERENT THAN OUR REGULAR SALES, IF YOU HAVE ANY MORE QUESTION CONTACT YOUR REALTOR OR HAVE HER CALL ME, IF SHE/HE NEEDS SOME TIPS. I AM SURE YOUR AGENT IS DOING EVERYTHING HE/SHE CAN TO MEET YOUR NEEDS.
1 vote Thank Flag Link Mon Oct 27, 2008
Rick,
Funny thing, just about anything can happen in real estate. The Seller's agent (Bank's agent) has the duty to get the best offer for the seller. The banks will almost never write a counter and yes the whole idea is to leverage all offers to get the best price. Seems unfair but really if you were the seller you would want the same thing.There are ways to write your offer to be the best every time. Keep in mind that Bank's agents are doing a lot of transactions right now and most of these are done on an computer screen not a live person. Email me, or call and I will do my best to explain.
Web Reference: http://bradbergamini.com
1 vote Thank Flag Link Mon Oct 27, 2008
Rick-

You admit you are already working with a REALTOR, and thus I really shouldn't be offering you advice, but your current REALTOR should be. I will say this: "Why can't it be an auction?" If it were your property being sold, wouldn't you want to garner the highest and best price? If an auction style listing yielded that result, wouldn't you be tickled pink? I don't see this approach as being unfair for anyone involved. The only thing that would be "unfair", is if the listing agent were to ignore your offer, or not submit your offer. That would be unfair. But you are being given a fair and realistic chance of purchasing the property. The same fair and realistic chance as any other buyer.
0 votes Thank Flag Link Tue Oct 28, 2008
Rick,

It is very frustrating for you and us agents! Unfortunatly the banks will take multiple offers and decide which offer they like the best.

It is very unfair for all of us! Hopefully you can come to agreement on a fair market price or look at other homes in the area.

Feel free to contact me if you have any other questions!

Lucinda
0 votes Thank Flag Link Tue Oct 28, 2008
Rick
If you are going to play with the big boys then you need to act like one. All properties have always been subject to best offer.
If this was your property you would demand the best price. Because it is a bank you think they should take an extra beating because after all they are the "bank".
I am surprised they even bothered to let you know they would entertain a higher offer. There are many banks that are just taking the highest price first round and then that is it, it's over.
Now that the American people are picking up the tab for the banks you would think that we could understand their trying to get the best price possible.
Go to a Trustee Sales at your local court house and see what is really going on out there. There are hundred of homes out there being sold off.
Sounds to me like you got "emotionally attached" to that property and then you got your feelings hurt. You need to detach emotionally and do your homework.
Happy house hunting.
Terry Forsberg
0 votes Thank Flag Link Tue Oct 28, 2008
Rick,

Don't pay more than the property is worth.

Did you and your Realtor do the research on the property so you know what it's potential value is?

If you did, then this wouldn't upset you enough to post here in Trulia.

Good Luck,


Stew Keene
Ph (480) 220-7491
Fax (866) 711 8573
StewKeene@yahoo.com
Keller Williams - Scottsdale, AZ
2008-2009 Master of Real Estate award recipient
ABR, GRI, ePro, CNE, MRE, AHWD
0 votes Thank Flag Link Tue Oct 28, 2008
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