Foreclosure multiple offers questions

Asked by Cheezehotdog, New York, NY Tue Nov 19, 2013

Foreclosure: We put in full price offer, other offer on property
My husband and I put in a full price on a foreclosed condo. There is another offer on the property that was placed before us and the bank has been going back and forth with them. Right now the bank sent them another counter and the other buyer has til tomorrow to respond. Is the bank obligated to continue their negotiations with them, or can they exit negotiations and accept our offer?

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24
Jorge Vega, Agent, Chicago, IL
Tue Nov 19, 2013
There are many reasons why asset managers decide to chose a certain offer over another. Some reasons are :

Financing
Offer amount
Earnest amount
Proper documentation
Proper offer submission
Timely offer submission
Repair request
Inspection & Attorney review contingencies
Cross outs on contract

And the list can go on and on. Your best bet is to make sure you are working with a realtor who understands foreclosures and can give you sound advice. Please let me know if you have further questions.
1 vote
Manuel Brown, Agent, Chicago, IL
Tue Nov 26, 2013
The bank can chose to do what they want. That is the honest truth. And if your competitors are offering cash it is most likely your deal will be looked at last. Cash is king especially in short sales and foreclosures.
0 votes
Seth Captain, Agent, Chicago, IL
Thu Nov 21, 2013
To Cheezehotdog or other interested parties:

You must assume that the general rules of Logic and Fairness, as you most likely understand them, do not apply to foreclosure home sales.

My recommendation to Cheezehotdog or others in the same situation is to imagine you are calling customer service, in a country where the language appears to be in English, but doesn't quite work the way you expect it to. You have to call. You are trying to resolve an issue. And you know, now that 'Steve' has answered the phone, that your odds are a longshot. But you have to try. You don't just hangup. Because everybody has had at least some success with the Steves of the world. You do the best you can. You change your intonation and pitch as much as possible. You even speak to the alleged manager. In the end, your issue still probably isn't resolved. You hang up frustrated and defeated, but you know you did the best you can and you find a way to move on.

That's how Cheezehotdog and all the other people in Cheezehotdog's place need to act.

And like a lottery ticket with slightly better odds, probably sold to you by a Steve, you may actually win one.
0 votes
Daniel Mirea, Agent, Chicago, IL
Tue Nov 19, 2013
Each bank/lender works a little differently, but they all have similar goals. They want to get the best price possible.
0 votes
David Hanna, Agent, Chicago, IL
Tue Nov 19, 2013
The key to getting the property you want in this situation is having the right strategy and as much information as possible.
At this point, make your best offer and if it is not acceptable to the bank/owner, walk away and find another property.
There is no defined process for this, the bank/owner can act as they wish, and in these situations, they may not make what you consider to be the rational decision.
This is just part of being a buyer in the distressed property (foreclosure and short sale) market.
0 votes
Bill J Delig…, Agent, Naperville, IL
Tue Nov 19, 2013
Than bank (seller) can do whatever they want. Submit your highest and best to the Listing Agent and ask them to resubmit to the seller.
0 votes
Suzanne Hami…, Agent, Orland Park, IL
Tue Nov 19, 2013
There is an old rule that says if there is a counter on the table and it is accepted, it is a deal. However, some banks make people sign something at offer time that says they can take any offer at any time, regardless.

Unfortunately, you will just have to wait and see.
0 votes
Mike Kravitz, Agent, Chicago, IL
Tue Nov 19, 2013
Submit your highest and best up to a price you are comfortable with. The banks are tough to deal with and change how they negotiate, or chose to negotiate all of the time. Good Luck!

http://www.mikekravitzrealtor.com
0 votes
Manoj Jakhar, Agent, DES PLAINES, IL
Tue Nov 19, 2013
Submit your best offer based on information your agent collected. depends on the bank but typically they entertain all offers and ask for highest and best.That does not sound right. The bank usually negotiates or counters ALL offers at the same time. Price is not the only factor though, cash or mortgage, type of mortgage, days to close and contingencies all matter.

Best Regards

Manoj Jakhar
847-791-3216
manujakhar@hotmail.com
0 votes
Josh Barnett, Agent, Chandler, OK
Tue Nov 19, 2013
There are no obligations or standard procedures when it comes to Foreclosures and which offers they will work with. Every transaction is different and the best negotiating tactic in foreclosures is patients and the not becoming emotionally vested in a foreclosure home until after closing.
0 votes
Tracy Marche…, Agent, Oklahoma City, OK
Tue Nov 19, 2013
Contact your Realtor and have them find out what the Bank's policies are and if they would be willing to negotiate your offer.
0 votes
Jacqueline S…, Agent, Chicago, IL
Tue Nov 19, 2013
The can end anytime before there is a contact, but since banks have so many properties to deal with, they have a process they follow. You will have to wait until tomorrow to find out the resolution.
0 votes
Ivan Sagel, Agent, Chicago, IL
Tue Nov 19, 2013
Hello,

The bank doesn't have to do anything. Each bank has its own policies and procedures. Are you paying cash and closing quickly? If not, you will not have much luck with foreclosures.

Best regards,

Ivan Sagel
312.515.7823
ivan@atproperties.com
0 votes
Dirk Gould, Agent, Chicago, IL
Tue Nov 19, 2013
Submit your best offer based on information your agent collected, make the offer as appealing as possible in ways other than price, and move on. In any multiple offer situation, just focus on the things you can control. Banks tend to play by their own rules in these situations.
0 votes
Trevor Curran, Mortgage Broker Or Lender, Great Neck, NY
Tue Nov 19, 2013
I don’t think short sales or foreclosures (REO’s) are for everyone. It takes a special kind of Buyer to have the patience and the stomach for these types of purchases.

Foreclosures
• Someone else's headache. Do you really want to walk in the door to someone else's repairs and deferred maintenance? YOU will have to pay to fix it up! Do you have the tolerance for that?
• Professional Investors. Cash investors can close FAST (3-10 days). And there are lots of cash investors competing against you!
• Difficult to Finance. Banks don’t want to lend you money to buy a home that isn’t habitable! Yes, there are special programs to assist you with renovation money, but those are more difficult to qualify for.

Short Sales
• Short Sales are better for the homeowner than for the Buyer.
• You'll wait MONTHS for the homeowner's Lender to approve the short sale
• You might not get the "deal" on price you expect.
If you don’t have the tolerance for Foreclosures or Short Sales here’s my advice:
There are plenty of motivated Sellers with their homes listed on your local MLS. Go find a good Local Mortgage Banker, get prequalified, then find a great, experienced Realtor, and buy the home you want at the price you're willing to pay

Trevor Curran
NMLS #40140
0 votes
Matt Laricy, Agent, Chicago, IL
Tue Nov 19, 2013
They can choose who they want to. Also, they may have better financing, could be all cash, etc.
0 votes
Cheezehotdog, Home Buyer, New York, NY
Tue Nov 19, 2013
Thank you to all that have answered this far. My agent is the one who told me about the other offer do I am assuming he was told this from the listing agent. Also, our offer went in days after the 'other' offer. I just wanted to know if it's a possibility that our offer could get looked at, or if it will have to be a back-up.
0 votes
Jack Lewitz, Agent, Lincolnwood, IL
Tue Nov 19, 2013
If there are multiple offers should have been notified and asked for. "Hugest and best". Some banks counter multiple offers but then select one they will negotiate with to contract. If it falls apart back ups are considered
0 votes
Scott Godzyk, Agent, Manchester, NH
Tue Nov 19, 2013
That does not sound right. The bank usually negotiates or counters ALL offers at the same time. Price is not the only factor though, cash or mortgage, type of mortgage, days to close and contingenies all matter. A lower price with no contingencies is better than an offer with inspection, fha mortgage and anything else added. If they chose not to counter yours, your offer may not be a strong. A good buyer broker experienced in REO homes can certainly help write the best offers banks love
0 votes
Matt Hoyt, Agent, Highland Park, IL
Tue Nov 19, 2013
The bank will do whatever it wants regarding negotiating. Know this, they will do whatever it takes to get the highest price. You only know what someone else told you regarding what they may be doing with another offer which may not be true. Stick with your guns on the price that makes sense to you based on the current market activity in the area AKA the comps. Put in your highest and best offer. tell the bank they have 24 hours to accept or you are pulling the offer. You can request proof of another offer, there is a document your realtor can submit for this. That doesn't really help you. Put in your highest and best offer. tell the bank they have 24 hours to accept or you are pulling the offer.
0 votes
Jack Lewitz, Agent, Lincolnwood, IL
Tue Nov 19, 2013
If there are multiple offers then each offer should have been notified and "highest and best" offer requested. Upon receipt of "highest and best" the bAnk would select the best offer they want to continue negotiating with until a final offer is agreed and accepted by both parties. Often these deals fall apart and the bank will reach out to the next highest offer and stArt the process over again. I know because I list REO properties and have multiple offers one one now.
0 votes
Philip Sencer, Agent, Chicago, IL
Tue Nov 19, 2013
How do you even know what the bank is doing with the other offer? It would be very odd if the listing agent told you, but the bank can do just about anything it wants with respect to negotiating. There are no rules and very little ethics involved. Whoever wants it the most will pay more. It is all about money.
0 votes
Annette Law…, Agent, Palm Harbor, FL
Tue Nov 19, 2013
Cheeze,
The element that is always missing from questions like yours is an indication regarding the fair market value. The LIST PRICE is often artificially low to attract mulitple buyers. Often one or more of these buyers are completely unaware of the strategy in play.
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If you offer is full price but below market value, and conversation is take place with the other party, you will get ONE more grab at the ring when they ask you for the highest and best offer.
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Do your homework.

Best of success,
Annette Lawrence, Broker/Associate
Remax Realtec Group
Palm Harbor, FL
727.420.4041
Move to the Front of the Line
(http://FirstLookHomes.us)
0 votes
My NC Homes…, Agent, Chapel Hill, NC
Tue Nov 19, 2013
They can do whatever they feel is in their best interest, if accepting your offer or offering you the opportunity to raise your offer is what they want to do they will, if they prefer another buyer they won't give you the time of day. Here's the truth, "Foreclosures are rarely the deal buyers believe them to be and I mean very very rarely base on my 35 years of experience. Bank asset manager's arrogance is only surpassed by their stupidity, remember these asset managers have never seen the property their selling, no less than nothing about it and proudly could care less. If consumers were smart they ignore all foreclosures for a year or two and let the banks choke on them.

I suspect you like virtually all my buyers believe it will be different for you, all I can do is suggest you read the link below and I hope you've done your diligence on the condo association as it's entirely possible you're buying into a destitute association and/or one that may not qualify for financing as condos in general have been struggling for many years to qualify for secondary market approval and without it their almost impossible to get financing for.
0 votes
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