Top 5 Reasons Why the Bank Did Not Accept Your REO Foreclosure Offer!

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This week I would like to spotlight five mistakes being committed by real estate agents on their REO property offers to the banks.

I hear from countless other broker and investor friends in the Southern California area how frustrated they are that their bank REO offers are not being accepted. When they send me a copy of their offer and ask me for some tips, I want to shake them when I see what they are sending and how they send it.

Here are the Top 5 Reasons the banks are not taking your offer and accepting someone else’s.

  1. Missing Information – Fill in all the blank spaces requiring information on the contract. Try not to leave anything blank. Place N/A (not applicable) in sections that you want to leave blank because the section does not apply or you do not want anything going there. Some of the listing agents have a flurry of offers on these REOs and if they have to second guess your intentions they will just move on to the next offer. They need to know what kind of financing you are using, etc. Be as DETAILED as possible!
  2. You did not follow their instructions – The MLS (Multiple Listing Service) has a section in it for agent remarks that is not visible to the public on or, for example. In this section you will find information on submitting the offer to the listing agent or to the bank itself. If it says to only e-mail offers why are you faxing your offers to them? This is a huge red flag to them because you cannot follow directions and you do not pay attention to detail. Do they think you will be able to close the deal if they go with your offer? I think not.
  3. You submit Incomplete Offers – Pay attention to what the bank wants you to include with your initial offer. The standard is to submit your offer on your State’s Association of Realtor’s contract form, along with proof of funds and an approval letter from your client’s designated lender. Pay close attention to this because most listing agents are just following the direction of the bank when they require you to get the ok from their designated lender. They are instructed NOT to present offers unless ALL of their criteria are met. I have knowledge of deals that were not presented to the bank because the buyer’s agent did not submit the offer with a pre-approval letter from the designated lender, even though the offers were for all cash. YES, all cash offers! The banks want it ran by their people first. Don’t miss out on that deal just because you want to cut corners. Dot all your i’s and cross all your t’s. Some banks want offers submitted with signed addenda and agents miss the link that has the bank addendums. Guess what? Do that and your offer will be chucked to the bottom of the pile.
  4. You use percentages instead of raw numbers – Remember that these listing agents have countless offers that they have to present to the bank. Do you think they have the time to do the math when you write on your offer “Bank to pay up to 6% of buyers closing costs.” They need hard numbers to work with. The listing agents have a portal on which they enter cold hard numbers into, which then goes to the asset manger. The bank does not see your physical offers initially. All the bank is interested in is their NET. It’s all NET for them. That’s all they care about. So, when you are asking for anything whether it’s a home warranty or help with closing costs, ask for a specific amount like, “seller to pay buyer’s recurring and non-recurring FHA closing costs not to exceed $6,000.” This makes the listing agents job easier and gives them a sense that you know what you are doing.
  5. Your submissions are Sloppy – Ok, so the bank states that in order to submit an offer you must send in an offer on your State’s Association of Realtor’s contract form along with proof of funds, pre-approval letter, bank addendum’s, blood samples, copy of earnest money deposit check, and they want all this e-mailed ONLY. So you go and make copies of all this and send an e-mail with 5 attachments. One attachment for each item; the last thing he or she needs is to go through all the attachments and get all confused and just skip you. What you need to do is get some good software that can combine multiple files into one. You can then take all of those attachments and combine them into one big file, and you can arrange the order in which they should appear. Of course, please don’t forget a quick cover letter touching on the major pluses about your offer that you want them to be aware of, when submitting an email with that one attachment.

These are just a few of the reasons that your offers are being overlooked and tossed out. I’m sure there are many other reasons that I have not touched on but for now, I’d say that these are the top ones.

Yes, you might have offered the most on the properties, but if you did not follow their directions, that may just be why they didn’t take your offers.  

Good luck in all you do America.

Photo: Bludgeoner86

About Author

Winston Westbrook is broker & owner of Westbrook National Real Estate Company servicing the cities of Victorville, Spring Valley Lake, Adelanto, Hesperia, Apple Valley & the surrounding Victor Valley High Desert communities of So. California. Specializing in short sale and distressed properties.


  1. I big reason in our market is multiple offers. Here’s an example. There was a short sale listing at $845,000 in which the bank had offers but could not get a deal completed so they foreclosed. The bank then listed the same property at $756,000. Within 4 days they had 61 offers. I’m told that the winning bid was over $875K and all cash. We had a very strong offer (over $850K) with strong buyers and were basically shut out. Not sure what else we can do here except to keep taking swings. I’m sure that we will connect soon.

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