Lissa1234, Home Buyer in South San Francisco,...

I made a all cash offer on a REO property for the listing/asking price. Bank has 14 additional offers all

Asked by Lissa1234, South San Francisco, CA Mon Aug 31, 2009

FHA loans for thousands over the asking price (10 thousand at this point). Why won't the bank accept an all cash offer for the amount they asked for? Any recourse?

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Hello Lissa1234,

How dissapointing. You are not alone. Happens often. As you heard the banks or any seller can accept or reject any offer they want. Banks are purposely pricing homes on the low side to create an auction. I am curious where you got the information on 14 offers and only $10,000 over the lsit price. With 14 offers I would assume the price would be closer to $25,000 or more over and I am surprised that all or most were FHA's. 25% of Bay Area Sales today are for all cash. I have seen banks take less for cash and then again I have seen others take the highest price. The inspection contingencies also have a big influence on banks. Same with time. But $$$$$ is the main deciding factor. When looking at properties forget the list price and research the fair market value.
Lee Ginsburg
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0 votes Thank Flag Link Sun Sep 13, 2009
The banks look at the bottom line, if there is $10k more on paper. There will be $10k more at the closing.
Conventional or FHA, it's all cash at the end (wired).

Been there, still there. =)

Jes Sierra, B.Sc.
0 votes Thank Flag Link Thu Sep 10, 2009
Sorry, no recourse... banks may accept any offer they wish (as any seller may)... the banks are making this common practice: to come in with an asking price that tempts enough buyers to bid up the price.... so we are seeing multiple offers on many of the bank owned homes.

The best advice I can give is bid what the property is worth to you... if it is not worth $10,000 more than move on. If it is pay it and don't look back.
0 votes Thank Flag Link Wed Sep 9, 2009
REO's can break your heart like that. First you get excited about a property, then the buyer's stampede in like cattle with their offers waving high in the air and the price goes up.

Even though you have all cash, which is great, other buyer's with loan pre-approval letters also carry a lot of negotiating power. Thus, the price goes up. 14 additional offers isn't bad, I've heard of 40 offers recently and even more than that in the past.

In my opinion, you might be better off going after a distressed property or one that has been on the market for high number of days. In these scenarios, I think you'll find that "all cash offers" will have more negotiating power and less competition.

Let's talk and I will show you how to do it.


Joel Diaz
0 votes Thank Flag Link Wed Sep 9, 2009
Hi Lissa1234,

Unfortunately, the seller, in this case the bank, can accept any offer they wish. Even though you we're prepared to pay their asking price in cash, there were others willing to pay more. The bottom line is to get the most out of the house. MORE MONEY. The other offers may not be as strong as your all cash offer, however the bank is willing to take a chance to get more money when the escrow closes. In the end, the bank will get all cash from the sale of the home.
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0 votes Thank Flag Link Mon Aug 31, 2009
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