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Is this normal or legal?

Friend prequal'd & bid on WF-REO 4 asking $.Realtor said bring in contractor 4 est. & they did.Told em to bid lower b/c other offers were lower.They thought they had it.Later told them it went for lower offer with an aquaintance of someone in bank.They were strung along.  Did they ever have a chance?
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February 23 - Prince's Bay
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Answers (6)

The one thing I'm having serious trouble with,  the Agent (I assume this was the listing agent since that's the only agent who would know first hand of "other bids") telling you to lower your offer? That is extremely strange and sends up red flags all over the place for me! Next time ask the agent to Email you that request! LOL.

The whole "acquaintance of the bank" thing is very unlikely (id question whomever is telling you that and ask them to support the statement with evidence of that). REO's generally require buyers NOT to be related or affiliated with them and sign documents pertaining to exactly that!

There are many reasons beyond price point that could cause an offer to be accepted or rejected over and above another, but as I stated earlier the one thing that's sticking like a thorn in my side is the list agent telling you to lower your offer!

It could be the list agent had a friend/client for whom he/she made efforts to funnel the sale to at an advantageous price (if you could prove that... their could be serious consequences to any agent who does that kind of bad business), this wont gain you anything in the end other than making sure IF the agent did such a dastardly deed, he/she thinks twice before doing it again.

Feel free to explain some more specifics if I've misunderstood what your saying?

Best Wishes...
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February 24
Profile picture for Dan Tabit
Lewi,
It's a competitive market place and when others are bidding, you never know how things will turn out.  I suspect what they heard about who won the bid is speculation and probably wrong.  Banks care about one thing, the bottom line.  I've worked with buyers purchasing REO's from major national lenders and regional banks and the person making the decision looks at the math.  If another offer was accepted that was actually lower it could be due to it being cash versus financed, or waiving inspection or other terms banks don't want to mess with. 
Yes, they had a chance in all likelihood. 
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February 24
We have no idea. We weren't there. If you suspect irregularities, you should address them to the parties involved.

All the best,
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February 23
Def doesn't sound right. Generally a Realtor would not say what is the lowest or higher offer on the table, or really give any indication to what the offer amount is. But what doesn't sound right to me is that an "acquaintance" of the bank won the bid with a lower offer? I know a Realtor who gets foreclosed listings from Fannie Mae and Bank of America, I've known her for over a decade. I can tell you this for sure, there are NO acquaintances of any lender out there shopping for these foreclosures. That sounds a lot more like the listing agent selling it to their preferred buyer as oppose to presenting all the offers they actually had. No asset manager would ever pick a lower offer simply because the buyer is an acquaintance. These asset managers who work for or on behalf of the banks selling these REOs are out of state (Texas, California, etc.). I would just start over with a new Realtor, someone who can make sure you get a fair shot at these homes. 
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February 23
I can't understand your short hand and abbreviations.  Who told them to come in lower? A Realtor or the contractor? Price is just one component in an offer. Since there was a contractor involved I am wondering if there was an issue and did you ask the seller to repair it or what. To get a better answer your questions needs to be more clear.
 
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February 23
Realtor should never have told them to offer lower.  The REALTOR can only say what the price is and can only show comps.  To do anything else might be legal but not normal (if it really was a REALTOR)
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February 23
 
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