Professional · Tucson, AZ · Member since 2011 · 51 posts · 17 votes
REO property on market approx 10 days. We see potential and want the house so our offer is cash at full listing price ($69K). Our buyers agent follows all seller agent guidelines and submits offer with 48 deadline. Seller agent responds that our offer was received and forwarded to bank. 2 days after our deadline my agent contacts seller agent who simply shrugs shoulders and says she hasn't heard from the bank. She does offer that there is one other person who is interested in placing offer but hasn't done so yet.
What the heck!?! full price offer...in cash and the bank doesn't accept? This experience makes Probate sales more attractive.
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
15y
First, if your agent were experienced with REOs, s/he'd know not to put any deadline on the offer. It doesn't serve any purpose when dealing with REO sellers -- they're going to work on their time-table and if you decide to pull the offer, you can always do it at any time, even after it's accepted (by just not signing the addendum). So, a 48-hour expiration isn't going to do anything.
As for why you haven't been responded to, it's most likely because the asset manager wants to give the listing more time generate multiple offers, and then use those offers to play off of each other to get a higher sale price (despite yours being at list). In fact, some asset managers don't respond to any offers for 10 days after the property has been listed.
My guess is that you put the offer in early in the week. Now the asset manager is hoping there will be more traffic (and more offers) over the weekend. If there are no additional offers come Monday, your offer will likely be accepted (or countered). If there are additional offers, you and the other bidders will be asked for your "highest and best" offer, at which point the asset manager will choose one offer to work with.
So, long-story-short, give it until after the weekend, and you'll likely get a response.
Specialist · Cleveland, OH · Member since 2011 · 1k+ posts · 852 votes
15y
Mark,
LOL! Welcome to dealing with banks! I quit doin it for that very reason. I used to make offers, and 6 months later get them accepted after I completely forgot what the deal was. Then I would go back and find the house was burned or trashed, so I had to change it up and start all over.
A lotta times in my market, an REO gets sold to people offering 72k on a 69k house. So you may consider going over asking price if you are really excited, just make sure it is still a GREAT deal!
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
15y
First, if your agent were experienced with REOs, s/he'd know not to put any deadline on the offer. It doesn't serve any purpose when dealing with REO sellers -- they're going to work on their time-table and if you decide to pull the offer, you can always do it at any time, even after it's accepted (by just not signing the addendum). So, a 48-hour expiration isn't going to do anything.
As for why you haven't been responded to, it's most likely because the asset manager wants to give the listing more time generate multiple offers, and then use those offers to play off of each other to get a higher sale price (despite yours being at list). In fact, some asset managers don't respond to any offers for 10 days after the property has been listed.
My guess is that you put the offer in early in the week. Now the asset manager is hoping there will be more traffic (and more offers) over the weekend. If there are no additional offers come Monday, your offer will likely be accepted (or countered). If there are additional offers, you and the other bidders will be asked for your "highest and best" offer, at which point the asset manager will choose one offer to work with.
So, long-story-short, give it until after the weekend, and you'll likely get a response.
Real Estate Investor · Las Vegas, NV · Member since 2008 · 127 posts · 10 votes
15y
Mark,
banks do all kinds of funny stuff. They want to maximize their profit as much as they can by creating a hype and possibly multiple offers situation and they sale to the best and highest, they get people on emotions and other things.
As just like any other sellers they want the most and will do what ever it takes to do so. bank is just a system, it doesn't make sense but thats how they do things.
Orlando, FL · Member since 2009 · 2k+ posts · 282 votes
15y
Mark, as others have stated, the banks have different strategies. I've found that they are usually pretty inflexible on price when it first hits the MLS, unless they're aware that the house is in terrible condition, although sometimes they will deliberately price it low to try to start a bidding war among owner-occupants, as Jason mentioned.
One strategy I've found that works sometimes is, even if your initial offer is rejected, keep following the property you like after its status is changed to Pending. Sometimes the deal blows up and you can put your cash offer in again ASAP and the bank is more willing to negotiate at that point.
Involved In Real Estate · Boonton, NJ · Member since 2008 · 39 posts · 15 votes
15y
J Scott is right on. New listings that receive ANY offers in the first week or so are considered hot and they will drag it out for a short time to collect as many offers as possible and they will then do the 'highest and best' thing and it might be two weeks before an offer is accepted, but not much more than that. They do run on their own time table, so deadlines mean nothing to them. Keep in mind, they're not reviewing offers at night or on the weekends, so if they don't get to yours before the weekend, tack on a few days. Your agent should follow up daily. If you keep the offer simple, no contingencies, cash, close in 30 or less, and maybe come up a little, you should have a chance. Start throwing in seller concessions and extended inspection periods and far out closings and you'll get breezed right over.
Professional · Tucson, AZ · Member since 2011 · 51 posts · 17 votes
15y
You guys are right. Today, Tuesday, the Bank responded back saying there are multiple offers and asking for Highest and Best. Following the advice you've given us we upped our cash offer, only asking for home inspection, and a 14 day closing. Hopefully our offer looks attractive and we get this property.
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
15y
Originally posted by Mark Wallis:
You guys are right. Today, Tuesday, the Bank responded back saying there are multiple offers and asking for Highest and Best. Following the advice you've given us we upped our cash offer, only asking for home inspection, and a 14 day closing. Hopefully our offer looks attractive and we get this property.
Be aware that many banks will come back with a "we have multiple offers, please submit your highest and best" when in fact, they have 0 other offers. It is a poker game they usually play. This is why I have always preached that making offers direct with teh list agent can be beneficial because you can get more of the truth in most cases. Knowing they have no other offers allows you to place your highest and best at $100 more, placing an exclamation point on the fact that your first offer WAS your highest and best. It has worked for me several times.
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
15y
In the event that there actually are multiple offers, be sure your highest and best offer still stays within the numbers that work for you. Don't play with teh numbers to make them work. If you factored an exit value of "X", don't change that just to make it work. If you factor "y" for the rehab, don't adjust that just to make the higher offer work.
Residential Real Estate Agent · Costa Mesa, CA · Member since 2008 · 1k+ posts · 380 votes
15y
As an agent, I like to get the REO agent on the phone prior to submitting the offer. It goes something like this:
Me: Hey _____, looks like I'm about to submit an offer on 1234 Main St for my client. Just wanted to make sure we weren't in a multiple offers over the listing price situation, I'd love for my offer to be competitive.
REO Agent: No, there are no other offers at this time.
-or-
REO Agent: Actually, we have 15 offers, 10 over the listing price, 7 of those are cash.
Me: Great, thanks I'll be sending the offer over shortly.
Why do this you ask? Because it forces the agent to lie or tell the truth. Why do I care, if I know that either response could be the lie? Well.. I've gotten pretty good at being able to tell when someone is lying over the phone, and I'll know whether to offer my highest and best initially without budging, or to leave some room to come up, based on what the REO agent's response is.
Of course, there are some agents that you simply won't be able to get on the phone if you haven't closed one of their listings before. Hell... you might not even be able to get their assistants on the phone. But these are usually priced so competitively that they aren't lying when they say multiple offers, anyway.
The problem here might be the real estate agents. If they know the property is worth a lot more, be ready for more tricks. I have seen agents hold up offers, to see if any more offers would come in.
It might be prudent to find out the person responsible for REO properties at the bank and let them know about your frustration. If it is a very large nationwide bank, then be prepared to wait longer as your bid is been passed on to headquarters.
Involved In Real Estate · Boonton, NJ · Member since 2008 · 39 posts · 15 votes
15y
Hold on a second! Lying? Withholding offers? A licensed Real Estate Agent wouldn't do these things as they are unethical and against the license law and they would risk losing their license if caught...I'm half joking. I know it's out there. Please, people, please don't forget that there are ethical brokers/agents out there - we are an REO broker that deals with ALL of the banks and/or servicers, and when an outside broker submits an offer on one of our bank owned listings, it is submitted immediately. If we tell and agent or buyer that are multiple offers, then there are multiple offers. It is against the license law to do the aforementioned things and many of us care enough about our careers to abide by the license law. Sorry if this rant is off topic, but it's not the first post where I've seen 'the problem is the agent'. Sure there are unethical losers out there. Do you best to feel them out, then find an agent you can trust.
Residential Real Estate Agent · Costa Mesa, CA · Member since 2008 · 1k+ posts · 380 votes
15y
Ed,
I wish they were all like you. They aren't. Why anyone would ever jeopardize their license or REO account(s) by pulling some of these stunts is beyond me, but no one ever accused realtors of being excessively intelligent.
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
15y
@Ed and Jake - An REO agent lying by saying they have multiple offers when they don't is just one way to getting the best offer for tehir client - the bank (which they have a fidicuary duty to. So, unethical, maybe, maybe not, from the standpoint of the buyer - yes it is, from teh standpoint of the seller - no, it is good negotiating techniques. Since when has a seller ever told the truth about actual operating costs? They don't, knowing this, buyers beware and perform their due diligence. This is nothing different here, as I stated, buyer beware and know that it could be just a tactic or it could be the truth.
As for holding a offer in hopes to get more, I don't think they actually holdthe offer, I believe they submit it to the bank (unless direvted by the lender to do otherwise - which does happen) and then have a hlding period in hopes of getting more offers so that they can pull the standard "highest and best" counter to all offers.
In a perfect world, all agents, all sellers and all buyers would tell the truth, answer and return phone calls, and provide all the real and necessary information. In the real world, it is business and a fool and his money are soon parted, just don't be the fool!
Hold on a second! Lying? Withholding offers? A licensed Real Estate Agent wouldn't do these things as they are unethical and against the license law and they would risk losing their license if caught...I'm half joking. I know it's out there. Please, people, please don't forget that there are ethical brokers/agents out there - we are an REO broker that deals with ALL of the banks and/or servicers, and when an outside broker submits an offer on one of our bank owned listings, it is submitted immediately. If we tell and agent or buyer that are multiple offers, then there are multiple offers. It is against the license law to do the aforementioned things and many of us care enough about our careers to abide by the license law. Sorry if this rant is off topic, but it's not the first post where I've seen 'the problem is the agent'. Sure there are unethical losers out there. Do you best to feel them out, then find an agent you can trust.
I have come to realize, we humans are fallible and tell little lies on a regular basis.
The adage, money is the root of all evil should not be taken lightly.
Personally, i hate dealing with banks and all the red tape. Some have the stomach for it and i wish them all the best.
Mark, next time you find any bank REO, try dealing directly with the bank personnel in charge and bypass the agents. Without the filter, you might get a more positive response. A good way to find the person in charge is to find the law firm that handles the closing for the bank, they would point you in the right direction.
Just one more thing, the deal you chase and want badly, might be the deal to avoid. In a down market, i say look for other properties and with time, you will soon realize, why that property did not come your way.