Auction question

Asked by Heidi, Sylmar, CA Sat Apr 19, 2008

After attending an auction a house I like went to a higher bidder and they fell through. I was the next high bidder but the auction company refused it because I am approved for an FHA loan (never had a credit card and thus no credit history so must go FHA) and they want to be closed in 30 days. Now the property is back with the lender. What should I do? I feel the bank would not want to pay carrying costs any longer and am not sure how to approach them about the bid and worried once it gets real listed on the MLS it'll be too late to get the deal for that price.

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Christopher…, Agent, Hemet, CA
Sat Apr 19, 2008
In any case, the lender must approve the sale terms and price at the auction. Although you were the "2nd highest bidder" the price may still be the issue. Even though you may have been the 2nd highest bidder, the owner will, as in many "auction" cases, counter offered at a higher price (Undisclosed reserve price). It has been my experience, in the SOCAL market, that the new MLS listed price when posted will be lower than the undisclosed reserve and, the seller will be more open to FHA or other financing options.
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