Home Buying in 85207>Question Details

Pb, Both Buyer and Seller in 85207

We are in the process of buying a home in Mesa, AZ. We have placed offers on 3 homes that are in

Asked by Pb, 85207 Tue May 26, 2009

foreclosure. In each instance, within 24 hours after we placed an offer on a home, up to 5 additional bids were received. In all three cases there had been no activity on the house for weeks prior to our offer. What is going on and how does a regular homebuyer, not an investor get to buy a home? I even offered more than the asking price on one home just to ensure I got it but to no avail. It appears our offer triggers the Bank or real estate agent to call investors to place an offer on the home. This seems extremely unethical and in the stock market world would be considered insider trading. Is this activity legal?

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Dear PB, my colleagues have given you a lot of information, but one thing I don't see is why you are looking specifically at foreclosure (bank-owned) properties, which are a hot commodity right now. If you've heard they are good bargains, you are seeing the reality, which is that the real bargains get snapped up almost instantly by cash buyers, and it's tough for a non-investor buyer to succeed.

You also don't mention if you have your own agent or if you are working with listing agents only. If you do not have your own agent, you need one. I also recommend that you focus on the home you want, rather than its status as short sale, foreclosure or regular sale. There are plenty of bargains out there that aren't foreclosures. Best of luck!
0 votes Thank Flag Link Thu Jul 14, 2011
Dear Pb,
Did you ever check back on the properties you bid on to see if they closed? If you are working with an agent, your agent could and should let you know what those properties sold for and compare it to your bid. In many of the MLS's it will state in the Closing/Sale remarks, how the property sold, the type of financing used to purchase the home. If you haven't checked on those, you should.

Also, I am now noting that you are also a Seller. Is your new home purchase contingent on selling your home? If it is, this is probably the number 1 reason you are not getting an accepted offer. On Most, if not all foreclosures, the buyer has to be ready to go. No Contingencies. You Have to be Pre-Approved and a letter of your approval is usually NEEDED at the time you submit your offer to the listing realtor or bank. If you don't have these, it doesn't matter what you bid. In the foreclosures banks eyes, you are not a ready, willing and able buyer.
0 votes Thank Flag Link Wed Jul 15, 2009
Welcome to the often confusing world of banks!! First you have to remember that this is not a normal sale and so the motivating factors that exist for a "normal" sale are gone. You are dealing with a non-emotional entity.
It is possible that there could be some "insider trading" going on but more likely is that the person at the bank only picks up the file when there is sufficent activity on the file to make then pay attention. Keep in mind the banks are so overwhelmed with short sales, foreclosures, loan modifications and keeping up with the every changing rules for loans.
If you are dealing with an experienced Realtor then they can help guide you through this new land. If you are trying to do this on your own then buyer beware! There are many things that can happen in these transactions that can cause a buyer problems - expensive problems.
Have you looked at non-foreclosure homes? There are tons of great deals out there and they would be much less frustrating!
Good Luck

Judy Craven
Big Land & Homes
Certified Short Sale Specialist, Certified Short Sale Negotiator
Web Reference: http://www.JudyCraven.com
0 votes Thank Flag Link Fri May 29, 2009

I understand how frustrating it is. Many times I try to explain the reality of the current market in the area to my clients and many times the don't believe me until the see it and experience it for themselfs.

What you really need to look for is not necessarily the total days on the market, but many times the days on the market at that price (or since the last price reduction). That might be triggering the bids, and not inside information. It is also probable that some or all of those did already have bids on them when you placed the offer, and you were not the first one or the trigger. It is not rare on this market for the banks to keep the property active for a while after receiving their first offer to collect bids.

Like you also said it is also very common for these properties to go for over asking price. To design your offer you will have to do a good work with the comparables, and also have as much information as possible about the seller (which bank it is), days on the market at that price, total days on the market. How you design your offer in terms of concession, etc. is also very important.

I hope that your agent is very experienced in foreclosures. They require a completely different set of skill. In order to be succesful with a bid, you will need to gather and analyze more informaiton than on a normal sale.

Good luck!

Carlos J Ramirez, PC, ABR, CNE
Associate Broker, HomeSmart -
0 votes Thank Flag Link Tue May 26, 2009
I know that you are very upset with this and can feel your frustrations. If you were an owner, and selling your own home, if you had had several showings on your property and NO offers, Now an offer comes in, it is your agents duty to call all the other agents to tell them, Hey, we just got an offer on 200 Jackson St., if your buyer is interested, they need to come in with an offer immediately. The agent CANNOT disclose ANY details on the offer. Remember, your agent in this instance is representing -you - as a seller, to get the best price and terms for your property. The list agent has a duty to the BANK (their client) to do the same. It happens here all the time. Think of how ALL the other Realtors are thinking as well, The home is now in a BIDDING WAR, for, best price and terms. The bank does not usually care if you are a 1st time homebuyer or not, they are NUMBER crunchers and they are looking at the bottom line. What offer is going to make them the most money. Remember, the bank has already lost money on the property. In Indiana there is an addendum that states: That the Seller (Bank) has received multiple offers on the property and that ALL buyers have been informed to make their best offer. This is frustrating WE KNOW. The question you should ask yourself when making your BEST OFFER------ If you found out later that the home sold for what you WERE WILLING TO PAY, would you be disappointed?
0 votes Thank Flag Link Tue May 26, 2009
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