Dealing with Banks when trying to purchase a foreclosed home? October 24, 2009
Posted by Banking in : Renting & Real Estate , trackback
I am trying to purchase a foreclosed home. I offered the bank the asking price for the home. The banks agent has yet to present the offer to the bank. He said he waits a week and then presents all offers.
Isn’t that practice a little unethical? Is that the “norm” for foreclosure sales? How long does it usually take a bank to respond to an offer?
By: countrylovin
About the Author:
Isn’t that practice a little unethical? Is that the “norm” for foreclosure sales? How long does it usually take a bank to respond to an offer?
By: countrylovin
About the Author:
Comments»
I think The agent should present your offer as it came in. The bank can say that they want to wait one week to see what offer come in but it should be in writing. Or the listing agent should have said this in the MLS. Either way it needs to be disclosed.
Most banks want the offers this way. They set up a time limit to collect offers and then all of them are presented at the same time. This helps keep the offers straight, they stay together instead of getting all spread out.
Presently they pick one within 24 hours of presentation…or none at all if not qualified offers came in.
I think You don’t say where the property is located, but…
Different foreclosure properties are handled differently by the bank/owners. Some require that the property be listed for sale for a minimum amount of time before reviewing ANY offers. Some will consider an offer as soon as it is submitted.
For example, HUD requires 5 days (I believe) exposure to the market and then owner-occupants are given priority. If none are the *winners* then the bid is open and offers are considered daily. Fannie Mae used to require 48 hours on market before reviewing any offers. After that, all offers were considered as they were received.
In both of the examples noted above, the actual offer can be submitted, but they will not be reviewed until the deadline has passed.
It has been my experience that there is usually a quick response, when the bank will present a counter-offer.
In the case of a “full price” offer, as you said yours is, it might take a little longer. This is because the “full price” offer still may be less than the previous owner owed on the mortgage loan. In this case, the PMI company or originating/servicing lender must agree or exercise their right to purchase for the list price. Not always, but it could happen. In this case it may be anywhere from a few days to a few weeks.
My guess is that if the property you want is an area with a lot of foreclosures, you should hear back rather quickly.
What does your agent say?
Good luck.