What legal circumstances can cause a bank to back out of foreclosure bid that they approved initially?

Asked by Anna, 11106 Wed Feb 11, 2009

I placed a bid on a foreclosed house today. It was almost asking price...this is how bad I wanted it. As our bid was submitted, we were told that the bank accepted a bid already, we were a day late. I am a little bummed, but am wondering what legal circumstances could cause a bank to recant and not accept a bid after initially accepting it. If our bid was way higher than the accepted offer, is there any way that they can accept our bid 1 day after they accepted the other? I was told that many buyers were bidding 50 cents to the dollar and this is why no one has been able to get the bank to agree to a price. Just wanted to know my chances sinces we upped our initial bid to the maximum price once we heard that someones bid was accepted

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Dallas Texas, Agent, Dallas, TN
Wed Feb 11, 2009
Many issues when a bank makes a decison:

However if the bank had agreed executed contract they are held liable terms and conditions of accepted offer. Banks have different concepts of their business practice than with a normal seller, it must fit within banks "box" anything outside of box may not even be considered.

Confer with buyers agent or attorney determine if you have any recourse .
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1 vote
Colton Hutch…, Agent, Houston, TX
Tue Sep 15, 2009
There is a huge difference between a verbal acceptance and an executed contract. Too many missing details. My advice is to stay on top of the property. Now days it seems like 1 out of 3 bust for one reason or the other. If you have an Agent, request that they follow up with the Listing Agent on the progress and keep you posted. If there are signs of trouble, you will want to resubmit your offer to the Seller.
0 votes
The Gina Sha…, Agent, Alpharetta, GA
Wed Feb 11, 2009
Hi Anna,

I am a realtor in the North Atlanta market and very familiar with the foreclosur process. The bid is not final till the bank signs the contract and become binding on all parties. The banks/asset company handling the properties for the banks disclose this stipulation in their contracts. Did you have a buyers agent representing you. It is very important that you have someone represent your interests in the transaction as you could loose your earnest money if you do not follow the process.

Good luck on finding a home..

Gina Sharma
Keller Williams Realty North Atlanta
0 votes
Bill Eckler, Agent, Venice, FL
Wed Feb 11, 2009

This happens frequently. Banks accept an amount verbally and recant on the agreement. There are many reasons why, but the biggest issue is how they are able to do this and get away with it.

This is not professional and essentially is exploitation of the potential buyer. At least at this point there seems to be immunity to being held accountable for these actions. In many respects, they are out of control.
0 votes
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