When working with lender owned properties you often times work with several people from the lending institution and it is not uncommon for them to "misplace" an offer. I am speaking from experience here and if they lowered the price it means that the lender has a policy to automatically lower the price every 2-weeks or so until they get an accepted offer. They probably did misplace your offer and since the house was not under contract yet they lowered it.
Your agent should be able to tell you all of this though. They should be keeping tabs on these things (that's what they are paid for).
Hope this helps you understand a little better!
So Friday, our agent tells us to bring our highest offer as the selling agent wants to submit all 3 counteroffers by monday morning. Our agent said that she'll call us Saturday. Sunday came, and still no call, so we decided to call her in the evening sunday. She doesn't answer. Monday AFTERNOON, she calls saying to submit our "verbal" highest offer , but that " I wouldn't bid much more if I were you"!!. We upped our offer 3k more than the asking price (our original offer was the asking price), which the selling agent had said he would take initially!
Next day, our agent calls and says our counteroffer was accepted. She said she'll have the selling agent email us everything.. It's Friday now (tuesday is when offer was accepted), and still no email!
When we spoke to our agent Wednesday, she said she was happy for us, but then within the same sentence said that "It's a nice neighborhood, I like it.. The only thing that looks like it's rundown is this house!" WHAT??!! I mean if she thought it was rundown, why not stop us from bidding to begin with? Is she not working for us??! To top it all off, she knows my father is waiting on us to buy property so that he can buy as well and (HE'S PAYING CASH)!
We've told her before when she would only say "the house needs alot of work" that the missing cabinets and countertops, WE can fix! Carpet is changeable, painting is do-able. Appliances is purchasable! Saying "it's rundown" is a big word! And then AFTER we won the house, she says that she noticed some patching on the wall, and so doesn't know if there was a leak there, but that it will show up in the inspection.. Why not tell us all this BEFORE, and show it to us in those pictures she had sent?
She said she's going to get an inspector ($350-400), and a termite inspector ($40-$50). We've never physically seen the house because we live in the opposite side of the country, so we relied on HER eyes, the pictures she took, and what the inspector will say.
Are we not supposed to pick our own inspector, because her and the inspector could be friends?
Also, I have a feeling that after the bank dropped their price by 5k from asking price, that we possibly could have bought the house for that price. What are the odds?
Our recommendation is to do your homework and determine what the home is worth now. Also calculate what it would cost to make the home livable to your standards, then arrive at a price you are willing to offer.
This offer should be your BEST offer because if there are multiple buyers at this point, you probably will not be given an opportunity to provide a counter offer. So make this one count.