Reo Offer to local bank

7 Replies

Hello, I'm new to the forum and wanted to join in hope of some help and tips for directions from  experienced buyers regarding my topic. 

I will start with the details regarding the property then where I'm at now

Back in May of 15' i came across a property that was heading to sheriff sale due to foreclosure, i was planning on bidding cause this house is in the perfect location to me, close to work and my family and has plenty of land etc. which make it ideal for my needs. Anyway prior to heading to the court house i did a little research and found out the homeowner was still living in the house, and bank had been fighting to evict him for the past 7 years! Don't ask me how this person was still in there house cause i have no clue, but anyway the bank filed a lis/pendens vs the homeowner back in 08' long story short i found out that property had (a high) child support lien on it so i decided to bail on the sheriff sale and sit back and figured the back would take it at auction. Sure enough with an approx amount due of $ 396K in April bank gets it back. They finally evict the owner by getting him arrested at his house on back child support, within a few weeks bank has a moving company and other people there clear everything out furniture old car in the driveway etc. Figured this is my shot to get involved, so i contact the bank directly mind you this is a local bank 6 branches tops in a small area of southern NJ, after talking to a few people I'm now talking directly to the assistant vice president, so I've been talking to him since April, explained my interest in purchasing the property and willing to submit an offer, he tells me they are still working on this and it's not ready for sale yet, every few weeks i call and ask when is this property going to be available the answer seemed to be the same "we are looking for a listing agent" or "Probably going to be listed by the end of the month" after months of endless phone call i contact him again in July, suddenly his realtor listing soon to come talk had changed and his exact words were that the bank had considered taking offers! Great he then proceeds with telling me who and where to send a letter of intend to buy, i put an offer based on recent sales of similar homes within that area this was about 10 business days ago which i know they received it cause the bank person called me July 31 as i had left him a message the day before to be on the lookout for the letter. Sorry about the book here but i wanted to explain the situation the best i could, anyway i haven't heard a word or got any sort of response from the bank by mail phone etc. i really like and want the house and was hoping at the least i would get a counter offer back from the bank if they didn't like my number. My question here is what do i do at this point? i know the original note from the homeowner was $ 240K he owned the land and just took a loan out to build the house, i don't think he paid much into the note as the bank filed lis/pendens about a year after the loan was issued. House assessment on file with the township is about $ 300K i would assume if this house was listed on the market by a realtor right now it would be in the ($ 250 to 265K) range. Based on this info what do you feel a fair offer would be? My original offer was with a 5% of sale price due on signing of contract and another 30% cash at closing with the rest being financed. I just don't know which way to go, is it normal for banks to take this long to make a decision? or why didn't they counter offer if they don't like my price? So what should i do now? Do i let some time go by and send another offer slightly higher? I was told by a retired realtor agent that if the bank accepted my first offer right away i probably offered too much, and said this type of negotiation are done on a going back and forth pace. 

I'll leave it at this and thank everyone on here in advance for any tips and suggestions, sorry about the long story but I'm just lost and looking for some directions on where or what to do with this. Thank you

@Antonio Vicidomini

Welcome to BP!

It's hard to answer the question is it typical for banks to take this long.. But I'll answe with "maybe but probably not." Sometimes small banks need to have offers approved by their board which might only meet once a week. But typically they verbally communicate with you before the offer is sent doe board review. 

I would tend to disagree with your retired Realtor friend. You obviously really rally really REALLY want the property and in that care you need to be prepared to pay top dollar. 

Updated about 6 years ago

Wow, so many typos! Pardon me!

Thank you for the reply Mark

I've spoken to one of the local branch manager and was able to find out that bank has board meeting every other Tuesday but it's now been over 2 weeks and I'm gonna wait till this upcoming Tuesday passes, to see if I hear anything. Based on this and from you're experience would you think it would be wise for me to submit another offer going higher by like 5 to 10 K to show that I'm aggressive about buying the property? Or should I contact the bank first and find out why if they didn't like my offer that they didn't counter? What is really the best way to approach this, thanks again I appreciate any suggestions!  

You said your offer was with 30% down, and the bank financing 70%.  Did you get preapproved with This bank for the 70%, and submit that preapproval letter with your offer?  Otherwise, they have no idea if you can finance it. They want to know you can actually buy it, not say okay then wait 30 days to see if you qualify for a loan.   You should have a strong preapproval from a lender, to submit with any offer.  This could be your problem.

Hi thank you Wayne for the reply

I did send a pre approval or pre qualification letter from my bank along with the offer as I was told by the the person I had talked to that the current bank that holds the foreclosed property can't finance it. I'm just wondering now if I send a second higher offer with a copy of escrow showing cash founds but the thing that bothers me is the bank has made no effort to reach out to me regarding anything, no counter offer no phone call asking for me to show cash founds to them regarding the 30% cash down payment, I'm not sure I never submitted an offer on an reo before but I inluded printouts of 3 recent sold properties in somewhat the same size range to show somewhat of market value all within the same neighborhood, and offered the price of most recent sold which was the highest price and of course bank get full amount as there is no realtor fee! But either I'm missing something or they the bank don't seem motivated to sell, I don't understand the lack of communication this isn't a major bank it a small local bank and i would think it should be much easier to deal with?

most of these banks are holding on to properties until the market peaks.   Some of them are selling them to their hedge fund buddies until the market peaks.   its a lot of shady stuff going on behind the scenes.

Originally posted by @Ron J. :

most of these banks are holding on to properties until the market peaks.   Some of them are selling them to their hedge fund buddies until the market peaks.   its a lot of shady stuff going on behind the scenes.

@ Ron J, sorry. I think that is baloney. We aren't holding on to stuff until the market peaks. If we knew when the market was going to peak, we'd be on T.V. doing the daily show circuit. We don't have hedge fund buddies we sell them to either and to that doesn't even make sense. "Selling them to their hedge fund buddies until the market peaks"? What, when it peaks we will stop selling them to our hedge fund buddies? Then what? We'll hold on to them? We'll sell them to non hedge fund buddies or, hedge funds but not buddies?

If we sell in bulk, it's a vetted process with brokers on the transaction and according to all local, state and federal rules. We aren't in 2007 any more. We have a huge set of eyes on us for every transaction we do and if we want to stay in business, we are doing all transactions with full disclosure and in full compliance with all rules and regulations. Maybe on television its different but in the real world there isn't any shady stuff going on behind the scenes.