Foreclosure in 07305>Question Details

H.B., Other/Just Looking in 07307

What is the bank trying to pull with their REOs??? A bidding war???

Asked by H.B., 07307 Tue Sep 9, 2008

I went to see a few REO properties in the Jersey City area. I found one I liked and put in an offer. The listing agent was frank in telling us no one was interested in the property and the bank was motivated to sell. I was told by the listing agent to wait a week for a response from the bank. In reviewing the latest online listings I discovered the bank lowered the price of some the REO properties - including the one I put an offer on by 24K. To me the 24K drop is huge and a slap in the face to me, as I've yet to hear back on my offer at the original higher listed price. What is going on here? Did the bank lower the price thinking it'd garner some attention and create a bidding war? As much as I'm interested in this property I'm not into playing games. Please advise me as to what is going on and what my next step should be. Walk away, demand an answer, or sit and wait.

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Hi HB,
Probably not, REO agents are required to provide monthly status reports including new listings, sales, activity and offers made on the subject property. It's not uncommon for the bank to reduce the price after such reports. My experience has been they do this regardless of pending offers, open house schedules etc.... As far as the week response time, that is a little long to get a response but as the number of REO properties increases, the turnaround time is increasing as well. We typically get a response within 2-3 days. There are occasions were it takes longer. The agent may just be telling you that so you don't call him every hour. Then if the response/counter offer comes back earlier, your a happy guy. If you want this property sit and wait, you're likely to get a good deal if you can be patient. This is what I tell buyers all the time.... when you buy a foreclosure you typically get a much better price on the home, but you pay for it in the terms. Meaning you have to jump through hoops, meet deadlines and be patient for responses. They expect you to make a decision right away, sign contracts right away, etc.... but they don't do the same. So the question you have to ask yourself is.... do you want the house and is the price you offered a good deal in your mind? Don't second guess yourself as to whether you could have gotten it lower or is the bank trying to bid it out. Just concentrate on what you can control. Hope this helps.
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1 vote Thank Flag Link Tue Sep 9, 2008
HB, I noticed you added some additional info. Since they lowered it to your offer and you're offering all cash, I would expect you to get this house. You may want to re-submit the offer. Make sure the offer is in writing, you provide a proof of funds letter or bank statement (don't forget to cross out your account number if you do) and any required state disclosures. These are typically required items for the bank to make a final decision on your offer. Hope this helps.
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2 votes Thank Flag Link Tue Sep 9, 2008
Hi Sj209,

They dropped the new listing price to match my offer. And I was going to pay in cash. The house has been in foreclosure for nearly a year now. I don't get why the bank is doing this if they claim they want to sell. Thanks!
1 vote Thank Flag Link Tue Sep 9, 2008
Congrats HB, best of luck with your new home!
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0 votes Thank Flag Link Mon Sep 22, 2008
I had the same issue happen last month. The listing agent said there had been no offers recieved on the property. The listing price was dropped on the same day I made an all cash offer no contengenciesand wanted to close within a week. Turns out that it was listed on bidselect. My agent was not familiar with using bidselect so she had another agent in the office to help submitt it online. This was done the day after i had originally made my offer in the office. By this time bidselect had already recieved someone elses offer and were negotiating and still considering other offers. SO I called my agent to see if she was aware of this; she was NOT. I told her I was consideng to up my offer and she advised me to wait until monday. By monday afternoon I had not heard from her so I called left a message and emailed a few hours after..on tuesday still did not hear from her..I called bid select to see if they had recieved my offer and advised me to speak with my agent bc they could not discuss this with me they would have to speak with my again I attempted to contact answer..On wensday I contacted another realtor and arranged to submit another offer on thursday morning. Come thursday morining it was too late another offer was accepted.. I was devestated this was the third time this had happened to me..I would advise you do alot of research on your own if possible and work with an agent who is willing to do what you want when you want..
0 votes Thank Flag Link Sun Sep 21, 2008
i think you are reading way too much into what happened. Unfortanately sometimes different people do different tasks for the assett manager. the price decrease was probabily put into motion long before your offer was put in, it takes that long to get it apporved. the person approving the decrease would not even know you had an offer in. then the assett manager dealing with your offer may or may not have the ability to make a decision without going to committee for approval if it was lower than what his limits are. as far as time to hear, i have assett managers who answer my offers within the hour i send them in and others who take a day, some 3 days. but usually not more than that. there is no reason for it if teh agent has constant contact with them and as far as a price chenage, that agent should have called you immediately so you could redo your offer. the blame isnt with the bank , it is with the agent. good luck with your purchase.
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0 votes Thank Flag Link Sun Sep 21, 2008
Hi Curt,

The bank accepted my offer! Now my lawyer is dealing with the dirty work.
0 votes Thank Flag Link Sun Sep 21, 2008
Typical REO's in our current market condition will take 3-4 weeks before a loss manager will even look at your file or offer. So in your situation they might have lowered the price without even seeing your offer. Banks are so overwhelmed with today’s market conditions that they are not staffed properly to handle all the REO's and short sales that are going on.
0 votes Thank Flag Link Wed Sep 10, 2008
Update: My agent spoke with the listing agent today and discovered the following.

1) The property is actually owned by a management company - somehow connected to the bank.
2) The bank had already scheduled the price drop this month before I put in my offer.
3) The contact at the management company is new and doesn't know what she's doing.
4) The management company and bank have a long list of foreclosures and it's likely they haven't even reviewed my offer.

Basically, the listing agent, my agent and myself are all perplexed at the process at the moment because we're not just dealing with one party but two or three. I'm asking my agent for info from the listing agent who can't get anything from the management company and who knows where the bank stands. It's just one big mess! Hopefully we can all get this sorted out.
0 votes Thank Flag Link Wed Sep 10, 2008
Okay, after reading the list of contingencies it makes more sense for the bank to field other offers. It's easy to get attached to a property even with the best of intentions. Hope it all works out well for you, good luck!
0 votes Thank Flag Link Tue Sep 9, 2008
Glad to be of help, definately let us know how it turns out. Best of luck!
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0 votes Thank Flag Link Tue Sep 9, 2008
Hi Sj209,

When we put in the offer a week ago the listing agent pointed out a few things: My desired closing date was too long - they'd want to close within 45 days. The house is sold "as is" my request regarding the electrical and plumbing must be in working order would be ignored. There was also talk of our request for an inspection as asking too much on our part. But who buys a house without an inspection??? Other than that we were told the offer was fair and would most likely be accepted by the bank, which is why I'm upset this is happening. My agent says not to get attached to the property but it's too late.

PS - Curt, your posts are so helpful. I'll follow your advice and respond back to you when I hear word from the bank.
0 votes Thank Flag Link Tue Sep 9, 2008
Hi H.B,
What the Bank want is the hightest and best offer.
My recommendation would be to detemined Market Value....What is the true value of the property.
Regarless where the Bank prices the property...if the bank overprices it or underprices the property
Believe me the Market will take care of the price. meaning if it is underpriced...the market will drive it up.
and if overpriced..the market will drive it downwards.
that is exactly what we are dealing in our area as well.

To Your Success,

0 votes Thank Flag Link Tue Sep 9, 2008
Where did you find this property if it was through the bank and they are not responding than that is one thing and I would sit tight if you put in an offer, but if you are relying on an agent then that is another situation in itself because you are not dealing directly with the bank whisch what you should be doing.
Check the banks website to see if it is listed under their REOs if it is not there than check the company that it goes to. If you need help with financing I would be able to help you with a quick close and rates are as low as they have been in over a year. My phone number is (908)253-4110.
0 votes Thank Flag Link Tue Sep 9, 2008
That does seem odd. It is normal for the seller to drop the asking price if the potential buyer is seeking concessions or offering non-ideal terms. An all-cash offer is preferred which should bring you to the head of the line. In this case you might want to contact your agent or the listing agent and confirm that they understand you are making an all-cash offer. Keep in mind, some buyers get nervous and they up their bid due to impatience. I can only think of a few possible reasons for the chain of events: 1. Discrimation - fairly unlikely but possible. 2. Mistake -- didn't realize your offer was all-cash 3. Greed -- hoping you will get nervous and up your offer. 4. Borderline fraud -- holding the property for some reason, perhaps another buyer is collecting funds or they know something about the property and don't want to sell it to someone who will come back and complain (local area person).
0 votes Thank Flag Link Tue Sep 9, 2008
Patience young grasshopper, patience. Was your bid higher than the new asking price? What type of financing did you obtain? It is a complicated process and factors such as concessions, closing costs, type of financing plays a role. The seller probably is seeking other offers. True, it would have been nice to counter you but the seller is under no obligation to do so. I would sit tight or move on. Demanding an answer is to be avoided.
0 votes Thank Flag Link Tue Sep 9, 2008
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