BiggerPockets

I am a first time homebuyer and have been looking for about a year now for a good foreclosure to buy low and finally found the right one in our price range. I saw it the morning it came on MLS and called my realtor to look at it the next day (Saturday) and write an offer. The home seems to be a steal, only 9 years old over 2k square foot 2 story home on 3 wooded acres in rural ohio, sweet modern floor plan, 2 car attached garage, poured foundation and full basement....full of water that has ruined the furnace and hot water heater. From what I can tell this is more a result of our wet spring and having the electric off and sump pump not kicking on than any structural problem. Yard needs better drainage to get water away from home but I can get this done easily. Home sold for 170k back in 02 asking price 97,700 plus 3% buyer credit. As is must have proof of funds and 1k EM.

I offered full price with 20% down, declined the buyer credit, and offered to pay all closing costs. Offer contingent on inspection. I felt like this was a slam dunk at the time on Saturday. On Monday while I was getting my proof of funds letter my realtor called the listing agent and was told there were 5 other offers. Seller faxed my agent a form for me to sign with offer saying I knew there were multiple offers and chose to keep my offer the same. I signed and returned.

I talk to my realtor this afternoon and she tells me they must have all offers on the table by 5pm and will decide tomorrow. She says my offer is strong but if someone comes in a bit over asking price I could lose it, she thinks the list agent has already passed the property around to her investor friends and wants to sell to them. I told her to increase my offer to 99.
Did I get hustled for an extra 1300 bucks being too eager or did I make a possible good move? I figured a little extra if it could be the difference maker would be worth it for a home I could spend a lot of years in.

If you like the house for the price you offer, be happy.

The last REO I bought was listed at $69K. My first offer was $73K. There were (supposedly, who really knows) other offers and I lost out. Something went wrong with the inspection and it fell out of contract. Second time around I offered $77K and won. After an appraisal, though, I reduced my offer to $70,500.

My buddy at my day job made a full price offer on a REO on Saturday. Another offer was on the table at about 90% of the asking price. They were told their were other offers and offered full price. The bank accepted.

The bank accepted. Who knows what's really going on in cases like this. If you like the house and like the price you offered, be happy if you win.

Buying REOs is a heartbreaking process. If this is the only offer you've made in a year, this probably isn't the process for you. When I'm buying I make as many as five offers a week. It takes making offers on 15-20 houses to buy one.

Do you think she wanted to raise the price to make more money? She only would stand to make around $30 from this move (not worth it). I think she wanted to make sure that you got it so that she gets paid. I don't think this is a hustle, but a realtor making sure the deal goes through. Good luck.

P.S., If your inspection doesnt go well you may be able to ask for more money back like the closing costs and the 3% credit.

tom, unfortunately this is normal these days. the last 2 house i've purchased, they asked for all 'final and best' offers. one of them i paid 19,000 on a 17,100 asking price. i felt like it was a good deal, no matter what the asking price. something to remember, although we focus on the price a lot, that is only a small part of the total offer's package. closing time and contingencies are a big factor as well. I've bought properties where others offered 15k more than me, but i offered to close in 2 weeks or less with no appraisal, no inspection. banks look at all these things together as an equation. best of luck, let us know how it goes--bryan

This thread hits home for me. This happens ALL THE TIME in my market. As a matter of fact, it happened to me 2 days ago.

I often tell myself: "Whoever that buyer is they paid too much, or maybe they know something I don't know."

The best you can do is figure out what your plan is for the property, run your numbers, from there you'll find out the max you should pay, write your offer and take it from there.

I probably should have raised my offer more but at the time I was worried we were coming on too eager and the list agent was trying to take advantage. I was told all final and best offers had to be on the table by Tuesday 5pm. Here it is Thursday night and I have still not heard anything on my offer. Is this a pretty common thing on a deal like this? My realtor says she does not want to hassle the listing agent and she knows we are eager and will let us know as soon as she hears. I get the feeling at this point no news is bad news although a return phone call would be nice.

If there still has not been a decision made tomorrow would the seller let me increase my offer one last time? My realtor seems to think the list agent already had her investor buyer lined up when she listed the home and wants to make sure they get it.

I really want this home and as a first time homebuyer tomorrows deadline is my moment of truth so I am starting to get pretty anxious about this deal. Could the lender who owns the property be taking it down to the wire to see if I will crack and offer more money? I can see why REO buying is not for the faint of heart but I am more emotionally invested in this home than any others we have looked into since we see it as a possible lifelong home.

Thanks for all the input guys. I really appreciate the insight.