Or should I say how NOT to present your offer on a bank owned home.
With the high number of bank owned and foreclosure homes on the Phoenix market these days it’s hard to go looking at homes and not bump into at least one or two….or more. If you are like many buyers you may be only interested in looking at foreclosure homes, which is understandable given that they are usually the lowest priced homes on the market.
Once you’ve found a bank owned home you like, making an offer on it is very similar to making an offer on a non-bank owned home. Your Realtor™ writes your offer on a standard AAR (Arizona Association of Realtors) Residential Purchase Contract, you sign it and he/she sends it over to the banks listing agent. Sounds simple enough, right?
Not so fast!
To illustrate the point let me give you an example. You spend your Saturday looking at homes, having found the perfect one and you decide you are ready to make an offer. Your agent prepares the offer and faxes it over to you for signatures. You go over the offer, sign it and fax it back. Your agent then faxes it to the bank’s listing agent. Since it is the weekend and the selling bank’s Realtor™ and asset manager don’t work on weekends the offer won’t be looked at until the following Monday, at the soonest.
Over the weekend several more offers for the same home are submitted to the bank’s agent, not unusual on a foreclosure home. In the case of this example let’s say there are 4 offers for the home. One more wrinkle, the bank has hired their agent to list and sell not only the home you made your offer on but a dozen others as well. And over the weekend he/she has received offers on several of those in addition to the home you like.
Monday morning the agent sorts through the dozen or so offers and sits down in front of the computer, logs into the bank’s website, enters the offers into the bank’s online form, and submits them to the asset manager.
Here is What Happens Next
Of the 4 offers submitted on the home you like; one of them is complete and ready to be submitted, one has been faxed back and forth so many times it is impossible to read, one is missing the buyers initials on a few pages, and one is missing the buyer’s Loan Status Report (LSR). The one complete offer is submitted to the bank and the other three are set to the side. The bank’s agent continues to submit all the complete offers for every listing in his/her inventory, setting aside the incomplete or unreadable offers for later follow up with the respective buyer’s agents, which could be several hours later.
If your offer was the one complete and ready to go offer you now have the advantage. The bank’s asset manager may look at your offer and accept it without even considering the three incomplete offers. If your offer is one of the incomplete offers you are now, as the saying goes, behind the eight ball.
The clock is ticking!
The bank is reviewing the one complete offer and your agent is scrambling to get the missing pieces of your offer to the bank’s agent. Imagine if your offer is missing an initial and you aren’t able to get to a fax machine until this evening. Or your offer has been faxed back and forth so many times it is unreadable and you have to resign the entire offer. Or you’re missing the loan pre-qualification letter and your loan officer is in meetings all day and isn’t able to return your call until late in the afternoon. A whole host of things could delay your offer being submitted to the asset manager for consideration.
Experience Counts
Having experienced first-hand the incomplete or unreadable offers that have been submitted for the bank owned homes that Karen and I represent as the bank’s selling agent, as well as the numerous offers on foreclosure homes we have submitted on behalf of our buying clients we have learned the “do’s and dont’s” of presenting offers to the banks and their agents.
Several of the many steps we take to insure your offer will be submitted to the bank without delay and improve the chance your offer is the one accepted are:
- We make sure that the offer is signed, initialed and dated in all of the appropriate places.
- We know which addendums to include with the offer to avoid being put on the back burner because something was missing.
- When asking for seller concessions we are very specific with the language to avoiding confusing the bank’s agent, delaying him or her from submitting the offer.
- We use an electronic signature process that allows us to avoid faxing the contract back and forth too many times, thus preventing the possibility of the offer become illegible.
- We email the completed offer to the bank’s agent, as they prefer this and it avoids faxing.
- Whenever possible, we meet with you in person when the offer is signed. This allows us to review the offer with you and answer questions as well as insure that all of the necessary initials and signatures are complete.
With today’s competitive buyer’s market for foreclosure homes, presenting your offer first is paramount and presenting your offer correctly is crucial.
