Buying bank-owned...How long does it take...and why?

Asked by Pathe Loland, 06050 Wed Jan 21, 2009

We just made an offer on a bank-owned property. I was told it could take weeks before we hear anything (which is going to be torture). Will it really take that long? If so...what are they doing back there in bankland? If it matters it's a connecticut home owned by WaMu.

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Phil, , Guilford, CT
Sun Feb 22, 2009
Bank Owned shouldn't take more than 1-2 days. However, with new listings they will typically wait 1 week before accepting an offer. The day before acceptance they may contact all bidders and request they submit 'highest and best'. So, being 1st offer on the 1st day will not help too much with REO listings. The new listings they expect 90-105% of asking price. If they don't receive any offers after a week or so, or only get low offers, they may lower the listing price and you can try to submit at 90% of there new value.

Low ball offers rarely work with REOs b/c they are already priced undervalue for a quick sale.
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Johnathan Di…, , 06770
Sat Jan 24, 2009
As long as the property is Bank-owned, you shouldn't have to wait more than a couple of days. In all of my contracts with bank-owned properties, I never give the bank more than 5 days to respond to the offer. If you give them 2 weeks, they'll take 2 weeks trying to get higher and better offers. Now, if you put in offer in on a Short Sale, then you can definitely be waiting 2 months before hearing anything. Yes, I know it's dumb but the banks need a month to cope with the fact that they gave a mortgage to someone who couldn't afford it. But as you are patient, their loss will be your gain in the end. Keep you head up high, and good luck.
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Kristina Zack, Agent, West Hartford, CT
Wed Jan 21, 2009
Hi Lathe,

I am associate with WaMu selling bank owned homes. The response is slow since they are transitioning and merging with a different servicer ( servicer meaning a different company/ system to receive offers, communication with the realtors etc etc) The transition is slow. Right now they are running 2 weeks. Keep following up with your Realtor on a status. Its frusturating right now, but they are trying to process the offers in the REO department while getting on board with a new system. Everything is automated now,(or will be) but in the long run, will make the process smoother. I work with other lenders where we get a response in 2-3 days. I wish you luck! :)
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Jeanne Feeni…, Agent, Basking Ridge, NJ
Tue Aug 17, 2010
Agree with Phil - bank owned property that is listed for sale on the MLS should be in position to be acted on promptly. A short sale is another matter, but that is the beginning of the process and "bank-owned" is the end of the process. The bank has taken it into inventory, hired an agent and listed it for sale. Assuming people are working and not on vacation, you should get a response to your offer and be able to move this along.

Good luck,
Jeanne Feenick
Unwavering Commitment to Service
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Julie Nearing…, Agent, Unionville, CT
Tue Mar 30, 2010
Prior to being an Agent myself, I had put offers on bank owned homes that I never heard from...........ever! I have noticed that certain agents never get back to you about your offers. So it also may depend on the agent who is working with the bank. We are not privy to their back room discussions and plans of actions on REO's. Banks seem to be able to do their own thing and they certainly operate on their own time line. Some banks don't take as long. I would suggest that you put an "end date" in your contract.
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Dan Ross, Agent, Southington, CT
Wed Jan 21, 2009
Weeks is the optimistic estimate. You could be waiting for 2-3 months for an answer. There are several factors that determine the wait time. One of the key ones is the home value. The higher that value, the higher up the food chain at the bank the approval has to come from. Another factor is the offer. Is it close to asking? If so, you could get a reply quicker. If it is way under, it will probably take some time.
Banks are swamped with REO's and pre-foreclosures. They have a greatly increased work load and reduced staff because of their financial woes.
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