Bidding on a Bank-Owned Property Sucks!

April 20, 2010 at 4:59 am Leave a comment

Banks selling foreclosed homes have earned the reputation of being greedy and ruthless — that they don’t care about anything except getting every penny they can from the buyers bidding on their properties.
I should say the listing agents at many times are overwhelmed and don’t care about anything else except how much the bank will net by selling the house so they can keep their contract with the asset managers who hire them to sell the properties.
I had a frustrating experience with one of these so called “Bank-owned properties.” My clients made an offer on a home that was owned by Deutsche Bank after it was two days on the market. The listing agent instructed me that the seller would not entertain any offers that are NOT full price within the first 10 days of the listing. She went on to say that because my buyer needed closing cost assistance, that the closing cost amount should reflect above the list price. She also informed me that the bank based the list price of the home from an appraisal that was done five days or so ago, but could not give me a copy of the appraisal when I asked.
My client made an offer following the instructions of the listing agent. The home was listed at $164,900. My client offered $170,000 to reflect the 3 percent closing cost assistance. A couple of days later, the listing agent came back with a counter. Among other things, the seller wanted the buyer to waive the appraisal contingency and asked that the buyer pay for the difference between the appraised value and the purchase price if the home did not appraise for the offer price.
My client did not have the money to make up any difference. The seller was not willing to help. And despite our good faith effort to follow their instructions, the seller did not want to help my buyer if there was an appraisal issue duly caused by their pricing instructions.
My buyers’ hands were tied. If they made an offer that was below full price, it would not get reviewed. But if they offered above full price, they would be left to cover the difference compared to the appraised value, and in this case they could not and would not.
Talk about greed. That’s what got this society to the high number of foreclosures in the first place.
My clients were interested in resubmitting an offer at a price that they thought the home would appraise for, but I was told by the listing agent that additional offers had already been received. What kind of a game are these listing agents playing — trying to deny a very good offer by responding with a ridiculous counter while waiting for other offers to come in so they can play “highest and best” offer.
This practice is frustrating, annoying and based on greed. These REO agents are making good money contracting with asset management companies of lender-owned properties. I certainly hope that when the market turns around, they will get their just Karma for the treatment they gave to their fellow agents.

Entry filed under: Arizona Real Estate, Chandler Real Estate, Foreclosures & Short Sales, Phoenix Real Estate, Real Estate Deals. Tags: , , , .

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