Homepath = fraud? Offer shown as accepted yet asked to resubmit?

[Kevin Rain]

We're trying to buy a Homepath home and it's been a little rough. We would be owner occupants, first time home buyers with 20% down. We made an offer the first day the property was listed, and during the "first look" period. We offered 97% of asking price with 3% towards closing after taking their first time home buyer course (which offers the 3% towards closing if you pass).  Listing agent responds that they will not offer 3% towards closing and will sell for 100% of listing price. We accepted this offer and it was shown as such on the homepath website. The listing agent comes back later and stated that the listing will be going into a multiple offer round and that we need to resubmit our highest and best (after we already accepted the 100% offer).

Has anyone dealt with a similar situation? This seems like extortion of some sort. Any recourse?

[Russell Brazil]

@Kevin Rain Well the question is did you have a ratified contract, or just a verbal from the agent.  If the contract is not ratified then they can still take offers.  It sounds like in this case your contract was not ratified, and another offer came in.  The listing agent is not going to increase how much they are making by the price going up incrementally. Even if the listing agent is a broker keeping the whole side of the commission, for every $5,000 the price goes up he is only making another $150. That hardly seems worth the effort.  The LA is incentived to get the property to closing here, not to get the most money for the property.

[Kevin Rain]

@Russell Brazil

Right, I understand 100%. I do not understand the logic as to why this is happening. The only thing I can think of is there is a relationship with a buyer out there that they are trying to appease.

It was not a verbal acceptance. Through the homepath website they countered our offer and we accepted it. This was all done online and we have proof showing the status of our offer as accepted. 

[Russell Brazil]

@Kevin Rain What constitutes a ratified contract in your state? If Homepaths online system does constitute it, then you have the property under contract and that is that.  In my area that would not constitute a ratified contract though. Our contracts must be in writing, and are not fully ratified until all signatures are on the contract and date of ratification is placed on the contract. (Verbal acceptance is technically allowed in Maryland, but not in DC or Virginia, but most people will insist on the written ratification).

If the Homepath status change is acceptable in your state, then your agent needs to point this out to the listing agent.

[Kevin Rain]

That's the question...just seems questionable that they are able to do that.

[Lisa Keefer]

I would think accepting a offer and having a ratified contract that are signed are two different things. I know in our contract that we signed after accepting a offer also contained a "No Knockout Clause" with this, the seller could not accept any other offers once we signed the contract, without this they could have taken a better offer on the property even after we signed the contract. This was in Maryland.

[Wayne Brooks]

The "counter offer" on Homepath is Not a counter offer, that you can accept.  It says, this is the price we want, you need to resubmit an offer for this price, and if we then sign it, then i's binding.  There's no fraud here, the agent doesn't have some mysterious buddy, it's just how the system works.  Obviously, someone else liked it at that price too.

[Kevin Rain]

Originally posted by @Wayne Brooks:

The "counter offer" on Homepath is Not a counter offer, that you can accept.  It says, this is the price we want, you need to resubmit an offer for this price, and if we then sign it, then i's binding.  There's no fraud here, the agent doesn't have some mysterious buddy, it's just how the system works.  Obviously, someone else liked it at that price too.

 Thanks Wayne. Seems misleading that the counter offer can be accepted but then rescinded. Also, when you say "resubmit an offer" do you mean through the homepath website or another signed paper contract offer?

We've submitted our highest and best. 

[Kevin Rain]

Originally posted by @Wayne Brooks:

The "counter offer" on Homepath is Not a counter offer, that you can accept.  It says, this is the price we want, you need to resubmit an offer for this price, and if we then sign it, then i's binding.  There's no fraud here, the agent doesn't have some mysterious buddy, it's just how the system works.  Obviously, someone else liked it at that price too.

 Also, the "counter" happened after we were notified of the multiple bidders. Why would they counter if it is meaningless and is going to a multiple offer round anyway.

[John Hamilton]

It sounds like the first view time had elapsed and that opens up the bidding to EVERYONE.

Taking the class and trying to negotiate a better price may have taken up time. And to find out the class didn't give you the 3% closing costs coupon is a pi55er. I found that with Homepath the asking price is the final price and they offer nothing in money savings to the buyer. Still, it's good practice to see if someday they will accept a "less than" offer.

You, or they, may have accepted the offer online, but the paperwork should have followed (purchase contract, etc.) to bind that offer. However, an acceptance from their end to your counter offer should have killed the bidding, if it was within the first view time. Once it goes beyond that point, they can entertain other offers and accept those offers.

It almost sounds like what my Mom went through where her agent screwed up and her offer wasn't accepted and then someone else got the house after first view elapsed.

[Kevin Rain]

Originally posted by @John Hamilton:

It sounds like the first view time had elapsed and that opens up the bidding to EVERYONE.

Taking the class and trying to negotiate a better price may have taken up time. And to find out the class didn't give you the 3% closing costs coupon is a pi55er. I found that with Homepath the asking price is the final price and they offer nothing in money savings to the buyer. Still, it's good practice to see if someday they will accept a "less than" offer.

You, or they, may have accepted the offer online, but the paperwork should have followed (purchase contract, etc.) to bind that offer. However, an acceptance from their end to your counter offer should have killed the bidding, if it was within the first view time. Once it goes beyond that point, they can entertain other offers and accept those offers.

It almost sounds like what my Mom went through where her agent screwed up and her offer wasn't accepted and then someone else got the house after first view elapsed.

 Thanks John. The "first look" period is still going on. We made the initial offer on day one. Then the following business day we were told that they countered at 100% of the asking price. We accepted that within minutes of the offer.  The class took 2 hours and we made the offer on the first day it was listed. For some reason the paperwork didn't follow the acceptance. 

Oh well. We made our highest and best, Hopefully other bidders did their research regarding the property because there was something we uncovered. The price they are asking / we are offering is a fair price considering the  issues...I just hope some Joe Smo isn't bidding ridiculous amounts thinking this house is good to go.

[Russell Brazil]

Originally posted by @Kevin Rain:

 For some reason the paperwork didn't follow the acceptance. 

That is the key aspect here. I do not believe you ever had a ratified contract on the property. No signed, ratified contract.

[Kevin Rain]

That's a bummer. 

[NA Jones]

Off topic - the lawyer at my brokerage hates the word 'ratified' because she says there's no such thing as a ratified contract.

[Wayne Brooks]

@NA Jones  Yeah, I quit asking people if they knewknew what that meant, when I heard them say it.  It exists, but has nothing to do with the contracts we sign every day.

[John Hamilton]

@Kevin Rain it's probably for the best. Now you know what to expect next time.

Much success to you

[Kevin Rain]

Well the multiple offer round was supposed to be over this morning but the listing agent is no where to be found....

[Jon Deavers]

@Kevin Rain

Are you working with a buyer's agent? Dealing directly with the listing agent seems like it is part of your problem. Most listing agents for Homepath (or any FNMA outlet, HUD outlet, HUBZU, or other REO processor) are conduits to the REO holder and are not able to make any decisions on what happens during the offers. If you don't end up with this one, I would suggest looking on BP for a good investor or REO focused Realtor to help you manage the offer and contract process. FNMA offers co-broker commissions (at least here in VA) and so hiring a buyer's agent wouldn't cost you anything and can provide some local market expertise and REO contract navigation expertise.

Best of luck with it!

[Kevin Rain]

Jon,

I have a buyers agent (rebating) and I'm just relaying what I'm getting from them. I did call the listing agent directly a few days ago when the initial hoopla was going down.

Just got off the phone....supposedly we are under contract but I've heard that before!

[Jaclyn Franceschini]

I also made an offer to a Fannie Mae Homepath property.  We negotiated on prices for the last 2 weeks, til they finally made an offer and I accepted this week Monday.  It shows as accepted on their website, so I started making plans for a quick cash closing on a house I want to occupy with my family and fix up.  I kept asking for a contract and they "countered" again today (Wednesday) asking for 9000.00 more than the price they offered me and I accepted!  I was completely shocked and unprepared to account for the extra funding because I accepted an offer right at my limit. I've already paid $150 to a property inspector yesterday because I wanted to close in less than 2 weeks before my lease is up.  Stupid of me, but how was I to imagine this way of business???

From a legal standpoint, I don't know if they can do this or not.  From a moral perspective, it's completely misleading.  I spent all day countering back at the original acceptance price, and they drop their counter 1-2k each time. I remind them firmly this property has unpermitted additions and needs 25-30k in repairs and will require a cash buyer such as myself.  My listing agent's company is in direct contact with the asset manager on this property, and she at first said "maybe they made a mistake."  I said this is impossible, given the amount of times we had spent negotiating on the final price they offered that I accepted.  I don't care what situation the bank or property holder is in; this is unscrupulous, misleading, and deceitful practices.

If we don't get back to the original acceptance price, I plan on reporting it to Consumer Financial Protection Bureau. 

[Russell Brazil]

@Jaclyn Franceschini Like Ive said to the earlier gentleman...you do not have a final price until you have a ratified contract.  The asset manager could have changed in this back and forth. The asset manager may have agreed to the price, then had it nixed from higher up.  A verbal agreement has no weight. You must have a ratified contract.  Your agent should not have let you pay for an inspection until you had a ratified contract.  There is nothing fraudulent or unethical here, you simply do not fully understand the process. Now that you do understand, do not make the mistake on the next property. 

[Jaclyn Franceschini]

I heard you above.  Still an unacceptable method of conducting business if seller offers a price, buyer accepts, and it's listed in their online database as Accepted.  I'm aware verbal agreements aren't enforceable, but this is in print.

In any other real estate situation, if a seller makes a counteroffer and a buyer accepts that in black-and-white, seller must sell.  Unless they specify in contract "upon partner's approval within x time frame," which is not present.

[Account Closed]

The contract is not accepted until the status is "under contract" then all bids are stopped and the closing process begins 

[Elizabeth J Humphrey]

I also have recent experience with Fannie Mae homepath properties. So far we have submitted an offer, then were told we were in a multiple offer situation and to resubmit highest and best, which we did. Then all offers were rejected within 30 minutes of the final closing time to submit. Our buyer's agent was told that was a "mistake". So we resubmitted the same offer again are are waiting for either a rejection or acceptance. Our offer is over listing price and we are putting 20% down with conventional loan. We have offered on other homepath properties and were sent rejection notices, never any kind of counter offer. So if my offer is accepted then I will not proceed until I have a contract in writing. Good information here.

[Jaclyn Franceschini]

Yes!  I was told they made a "mistake" too!  I said that's impossible - we countered back and forth 3 times before they gave me a purchase offer amount I accepted on Monday.  By Wednesday, they countered again with a price higher than we began with originally altogether.

Mine is a cash offer and I wanted very much to close by the end of this month because my lease is ending, and will end up costing me an extra $2100 to stay month-by-month.

A sales director for the Florida Fannie Mae properties saw this forum, reached out to me this morning, and is looking into this process on my offer.  She said she'd get back to me by the end of today.

[Jacques Wurms]

We placed an offer received an counter offer from Fannie Mae and then they rejected their own counter offer. I was very upset and my broker told me go sue the government and good luck with that :)