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does a bank normally hold offers on bank owned homes (not auctions) to see if a better one comes in?

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February 10 2010 - Sacramento
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Answers (20)

I will speak in generalities because all of the agents answers below are correct. Each situation is different depending on the seller. However, there are some key factors to be aware of.
1. Is the seller a governmental agency...HUD/FHA,FannieMae,Freddie. If so investors must wait to make an offer (time varies depending on what agency it is). Owner occupants get first dibbs.
2. Price and time on the market. If it a steal of a deal, and it has been just listed expect a highest and best offer counter. If the price isn't a steal and it has been on the market for a while they will answer your offer quickly.
3. if the property is non government owned and it has a pool or other item that creates liability for them they will answer quickly.
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January 08 2011

It depends on two things:
1. The bank
2. The asset

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January 06 2011
It all depends on the bank and their policies. Some banks just want to get the inventory off their hands as quickly as possible. Others want to make the most profit and sell quickly.
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January 05 2011
Many banks require the home to be listed for a number of days before they will look at any offers !
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January 04 2011
Most banks like to offer the property to owner occupied people for the first couple of weeks then open the bidding process to investors. It's not unusual for the banks to stall a bit. Also, I'd like to add that not all banksnare the same. Some like all offers to be submitted and other like the agents to exhaust the counter process. Hang in there
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January 03 2011

I have banks accept the first offer that comes in and or counter back at there price, I also have had banks take several offers and counter to all for a highest and best offer.

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January 03 2011
I have seen the listing agents of bank-owned homes tell me that they will not submit the offers to be reviewed until the home has been on the market for X number of days, usually about a week. So it's not too uncommon.
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January 03 2011
Yes of course, banks will try their best to reduce their losses and will try to get a price that will be around the appraised value knowing that if a person will like to buy a property with a loan will need to meet the appraised value to move forward. Sometimes when the property is in distress, they will get a lesser than appraised value, but most of times, Lender hired realtors will have a buyer ready to buy those.
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November 16 2010
Generally banks crunch the numbers, so if the first offer is reasonable, they tend to not waste time and go with the first position offer.
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November 16 2010
It is not uncommon for lenders or asset managers to require a home to be listed for a specific amount of time before offer are submitted.

My advice:  Make sure you make your highest and best offer up front so you don't miss out on a house.  When there are multiple offers, agents may be directed by the lender/manager to only submit the best 1, 2 or 3 offers.  Don't expect a listing agent to come back asking for highest and best, offer it right up front.
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November 16 2010
As an REO listing agent I advise my asset managers to let me show the property at least two times before reviewing offers.  Once for brokers and once for the public.  I often have 2-4 offers in hand before the property has even been listed on the MLS.  So sometimes they listen to me and sometimes they don't.  Max is right, it really does depend on the bank. 
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August 13 2010
Alot of this depends on the bank.  Some banks need to sell their properties as quickly as possible and are willing to take a price cut if a decent offer comes in.  Other times they will wait 7-10 days before even looking at any offers.  This creates a sort of panic with people often times paying much higher for the house than they would be comfortable with.  Anytime there is a long wait I do not recommend staying in the transaction as there are many options currently available to buyers.
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July 15 2010
According to the REO agents in our office.  Some banks want the listing on the market for a specific time before they want the listing agents to submit the offers. Then it can vary on whether the bank wants them to submit all the offers, the 3 best or just the highest and best.  I have found it all  depends on the bank.    
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February 11 2010
I have not come across the bank waiting for more offers, usually they ask the listing agent to do that.  This is especially common when they list the home for less then market value to try to incite a bidding war.

  Some banks have set standards that if an offer is more then a set percent from the list price or BPO, the negotiator cannot authorize the sale without getting it approved.  In one bank this was 7% and approval could only happen at monthly commitee meetings.  Hope this helps.
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February 11 2010
My most recent experiences in making offers on REO homes is that if your client's offer is competitive, banks respond pretty quickly (in the last three such homes I sold I had responses in less than 24 hours). If the offer is way below what the bank is looking for they might sit on it till they get better offers. But they sure don't sit on good offers these days.
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February 11 2010

I have not come across the bank waiting for more offers, usually they ask the agents to do that.  This is especially common when they list the home for less then market value to try to incite a bidding war.

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February 11 2010

As other people have stated, the listing agents frequently collects offers, but once it gets to the banks this is usually not the delay.

Banks usually wont wait for a better offer (this really depends on the bank) once they receive the offer because they are currently so overloaded they just don't have time to process more than one offer on a property at a time. 

Usually banks will get an agent to drive by the home (occasionally actually enter the home), and give them a rough estimate of what the home is worth.  Depending on the condition of the interior this can be way off. 

If your offer is within about 10-15 percent of the BPO (about the amount they expect to pay for foreclosure, lost mtg payments while it is listed, property tax and utilities, ect if they have to reposes it and sell it as a bank owned home), and the owner has correctly submitted all their documents and qualifies for a short sale, there is a good chance they will accept your offer, but it can take the bank months to process all your paperwork.

If your offer is not close to the BPO, the sellers agent can try to get a new one, or wait to see if more homes in the area sell for prices that support your offer.   A good agent might include a letter to the bank with you offer stating why they think your offer is reasonable (the bank may or may not read it).

Each bank is different, and short sales can be incredibly frustrating for everyone involved, but you can get some amazing deals.  Hope this helps.


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February 11 2010
REO offers are sometimes held in hopes of further offers by sellers themselves or, more often, by their agents who have been directed to forward ONLY one offer, the best. The Purchase Agreement states the seller must respond quickly but banks and other lender owners often ignore the boilerplate. It is frustrating and of questionable ethics but the owner has you over a barrel if you want to participate.
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February 11 2010

As FriendshipProperties states, it is not the banks, it is the listing agents. The offers can be held for as long as the listing agent chooses. It can be extremely aggravating when they "collect" offers for an extended period of time.

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February 10 2010
A lot of the big REO Agents with houses priced well below market value will make sure the property is on the market for at least 1 week so everyone gets a chance to see it.  If there is more than one offer at that time .. they will send a request for "Highest + Best" Offer.
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February 10 2010
 
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