can you bid on multiple foreclosures or just one at a time?

Asked by MAKEitHAPPEN, San Antonio, TX Tue Jan 1, 2013

My agent doesn't want to help me with buying foreclosures because of the long process. Am I able to bid on more than one at a time to avoid the long delay

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14
Gregory Touc…, Agent, San Antonio, TX
Fri Jan 4, 2013
Making several bids is within legal limits, however it increases your risk of liability.

Here in San Antonio the average price for the "earnest money" is $500 for houses priced $50,000 and below and $1000 earnest money for houses priced from $50,000 and up. This 'earnest money' goes into Escrow, meaning that a third party holds it until the day the deal closes.

If you fail to perform on a contract that both parties have signed, at very least you surrender the earnest money. It is possible to be sued for non-performance for the amount of the contract signed, but most often the house goes back on the market. That is the risk you are taking.

Foreclosures, also include other cost during the purchase process. You can read more about it in one of my Blogs.

Let me know how else I can be of help to you.

Gregory Touchstone
Keller Williams CIty View
210-660-2834
1 vote
Patrick Vend…, Agent, Virginia Beach, VA
Tue Jan 1, 2013
Dhani, since you will buy just one house you should not bid on more than one house at a time. If you tie up more than one house you prevent others from bidding on the house you don't buy. Also, what if they both get approved. You could have a serious legal problem then. It's unethical for an Agent to assist you to do this. Pick your favorite home and go for it!
1 vote
Dorene Slavi…, Agent, Torrance, CA
Mon Jan 7, 2013
Dear Make it,

You would have to have quite a bit of Good Faith money available to include with your offers. In California its 3% of the asking price. no a $74,500 house in my state, your GF would be over 2,000. You run the risk of losing that if you enter into contract with more then one seller and cannot perform (cannot actually purchase). I believe this is true in every state, but the amount might be different in Texas.
0 votes
Guy Gimenez, Agent, Austin, TX
Mon Jan 7, 2013
MakeItHappen,

it sounds like you are not at all familiar with the purchase process. You will always want to have a contingency included in your contract in order to limit your financial and other legal liabilities. With the proper contingencies in place, you would likely lose less than $150.00 under a termination option. It's all about drafting the contract properly, as allowed by the banks contract form / addenda.
0 votes
Kelly Spicer, Agent, San Antonio, TX
Mon Jan 7, 2013
If your agent doesn't want to do foreclosures, find one that will. Some foreclosures and banks are really hard to work with. I don't blame the agent, because it would take more time and it wouldn't be cost effective for them.
0 votes
Kelly Spicer, Agent, San Antonio, TX
Mon Jan 7, 2013
I would bid on one property at a time. What would happen if you put in multiple bids and you won 2 or more of them. That would make you finacially responsible (and you could be sued if you don't purchase as promisted).
0 votes
MAKEitHAPPEN, Home Buyer, San Antonio, TX
Thu Jan 3, 2013
Am I getting to broad in my search or is this a good strategy in finding the house I want?
0 votes
MAKEitHAPPEN, Home Buyer, San Antonio, TX
Thu Jan 3, 2013
Thank you all for your help. Randy Elgin, How is the amount to hold each house determined? Is that amount called escrow? If I understand correctly, the money to hold a house would not be returned if I win the bid and decide on another house or if I'm outbid. I am a new home buyer by the way. I am interested in foreclosures because there are more options at better prices and I am in no rush. Thank you once again for your help
0 votes
Guy Gimenez, Agent, Austin, TX
Wed Jan 2, 2013
Thanks Randy for clarifying yet again for the poster. Very disturbing to have ill-informed brokers and agents from other states make outlandish and derogatory statements about others, when the party making the comments clearly doesn't understand investing in Texas, and lacks the requisite knowledge of local customs and practices to make such assertions.

.
0 votes
Randy Elgin, Agent, San Antonio, TX
Wed Jan 2, 2013
Dear Makeithappen,
Homes that are being foreclosed on at the county court house can be bid on at the same time. However, homes that have been foreclosed and now on the MLS can be bid on at the same time provided that you are willing to provide the option money to hold them and enable yourself to walk away from the homes that you don't really want to purchase.
I've done this several times with buyers that are both investors and buyers wanting to occupy the home. It isn't an issue as long as you understand the process which I'd be happy to explain to you.

Randy
0 votes
Guy Gimenez, Agent, Austin, TX
Tue Jan 1, 2013
Tim, the problem with your assumption is that any offer made will most certainly be made with inspection or other contingencies. Not sure how it works in NC, but in Texas (where the buyer is located by the way), an agent having a buyer make multiple offers without any contingency (assuming the buyer is not prepared to purchase several properties) would border on malpractice.

I've been making multiple offers for more than 13 years and thus far have never had an issue, except that I can lose the fee associated with my termination option on the homes I choose not to purchase after an offer is accepted. However, at a hundred bucks or so I consider this the cost of doing business.

I understand traditional agents/brokers not be actively investing may not agree with this, but nonetheless, this is a very common practice in Texas...which again is where the poster is located. Since the poster is investing, it is not only silly and unproductive to wait for individual banks to respond (many banks state upfront they may not ever respond to your offer unless it's accepted), it is a sure fire way to ensure you fail as an investor.
0 votes
Royce Simmon…, Agent, Cibolo, TX
Tue Jan 1, 2013
In general, you should only bid on one property at a time but it truly depends on what kind of properties you are talking about (per discussion below). The type of property should dictate how you should press ahead with offers - if thinking of mulitiple offers at one time, team up with a very experienced Realtor that has a track record with this type of process......

Royce Simmonds, Broker-Owner
Simmonds Real Estate Inc.
http://www.roycerealestate.com
0 votes
Tim Moore, Agent, Kitty Hawk, NC
Tue Jan 1, 2013
I disagree with Guy's comment below and find it wreckless and dangerous. I am assuming you are talking about making offers on bank owned homes, not those in actual foreclosure. Let's assume you make 3 offers on homes. Let's say the banks that own them wait a week to decide. You have written three offers and signed three documents. Let's say that on Monday all three banks agree to your three offers and sign the documents that now include your signature and theirs. You are now under contract on three homes. You could be in for a problem, i am sure you see how. Guy's plan will get you in a pickle. I think you could make an offer and wait a week, withdraw it and make another.
0 votes
Guy Gimenez, Agent, Austin, TX
Tue Jan 1, 2013
You can bid (make offers) on as many homes as wish. Remember, many of your offers will not be accepted by the bank so if you want to increase your chances of actually purchasing a foreclosure, it may be beneficial to put out multiple bids. On my investment purchases, I bid on multiple homes at a time realizing that only only one or two will ever be accepted. Once I get an accepted offer, I simply withdraw my other offers from further consideration. If you're bidding on HUD, FNMA or other government owned properties, the process is a little more complex for an agent which could be a reason why your agent doesn't want to participate multiple offer scenarios.
0 votes
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