Presenting Your Offer on a Bank Owned Home

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:

1. We make sure that the offer is signed, initialed and dated in all of the appropriate places.
2. We know which addendums to include with the offer to avoid being put on the back burner because something was missing.
3. 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.
4. 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.
5. We email the completed offer to the bank’s agent, as they prefer this and it avoids faxing.
6. 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.

Arizona Real Estate & Swimming Pool Barrier Laws

As a father and long time resident of the valley this is something that is very close to my heart. Summer in Arizona bring about thoughts of backyard barbecues, trips to lake, tubing down the Salt River and lounging by the swimming pool and cooling off.

But with summer comes the gut wrenching, heart breaking and almost inevitable chain of very tragic news stories like this one, Drowning Victim, 3 , is ID’d . It goes without saying, or at least it should, ALWAYS, ALWAYS, ALWAYS WATCH YOU KIDS AROUND WATER!

When it comes to purchasing a home in Arizona with a pool The Arizona Association of REALTORS® (AAR) Residential Resale Purchase Contract states in section 6g lines 217-220;

“Swimming Pool Barrier Regulations: During the Inspection Period, Buyer agrees to investigate all applicable state, county and municipal Swimming Pool barrier regulations and agrees to comply with and pay all costs of compliance with said regulations prior to occupying the Premises, unless otherwise agreed in writing. If the Premises contains a Swimming Pool, Buyer acknowledges receipt of the Arizona Department of Health Services approved private pool safety notice.”

Buyers, I hope you got that; per the standard residential purchase contract you are agreeing to investigate the laws, comply with the laws and pay all costs of compliance with the laws prior to occupying the premises. Buyers must complete this investigation during the Inspection Period, typically the first 10 days from the date of contract acceptance.

When choosing a home inspector, be sure to ask if they are up to date with the state, county and municipality Swimming Pool Barrier Laws for the area the home is located in. Request that they put in writing their findings on the status of the home’s pool barrier. If the barrier is found not to be up to code some of your options might be; request that the seller bring the barrier up to code, cancel the contract, or pay for the barrier to be brought up to code out of your own pocket.

Arizona’s Swimming Pool Barrier Laws can vary from county to county and city to city. At a minimum A.R.S. §36-1681 requires that all residential swimming pools are enclosed by a barrier. The Phoenix Association of Realtors® has put together a brief summary of several county and city laws regarding pool barriers. While this summary is not a complete detailing of the laws it is a good place to start. The Arizona Association of Realtors® has compiled a list of Pool Barrier Law Contact Information to help buyers obtain a copy of the pool barrier law requirements that may affect the property being purchased.

Some last words of advice. Do NOT count on barriers to keep children from reaching the pool. No barrier is foolproof. Barriers only slow a child’s access to the pool. Do NOT be distracted by phone calls, doorbells, or chores while children are in the pool. Attend CPR classes. Lock passageways (such as pet doors) leading to the pool. Never leave children unsupervised in the pool, around water, or inside the pool area – not even for a second! No amount of water is too small for a child to drown in.