Can you negotiate with a bank??

jane__nyOctober 17, 2011

Looking at a foreclosure which needs some work, one of which is a roof. Its not leaking but workmen at the premises mentioned the roof would need replacing. The bank has hired these workmen to do some cosmetic repair and to put in new appliances.

Bids are going in on the house and we wonder if we could attach a request for credit towards a roof.

Has anyone tried to negotiate with the bank on a foreclosure? My agent laughed at me, but I feel like 'hey, you never know.'

Jane

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brickeyee

"As is"

Banks just want to unload the place while keeping losses as low as possible.

They often will not even look at a contract with any type of contingency.

Lower your offer by the estimated cost.

    Bookmark   October 17, 2011 at 3:06PM
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maddielee

We have purchased foreclosures. Have never paid the asking price. Write the contract with your offer and see if it gets accepted.

Your agent should know better then to laugh.

ML

    Bookmark   October 17, 2011 at 5:42PM
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ncrealestateguy

What Brickeyee said.
Not paying the asking price is not the same as submitting an offer contingent on agreed upon repairs upfront.
Are you buying in Fl or NY?

    Bookmark   October 17, 2011 at 8:04PM
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jane__ny

Florida. But we decided to pull our bid because with the cost of replacing the roof and the other repairs, it would have brought us to our price limit. We really liked the place but was afraid what we couldn't see and decided not to go ahead.

I would have offered lower, but the agent said there were 5 offers all higher than the asking price. So we decided to drop our bid.

The deadline was today at 3pm and we got nervous.

Not sure how to handle these sales. Florida is mostly short sales and foreclosures. Hard to find a regular sale in our price-point and sq ft.

Jane

    Bookmark   October 17, 2011 at 10:16PM
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ncrealestateguy

If there were 5 offers on the property, it was priced very well. Your agent was correct that it would have been a waste of effort to submit an offer with a repair contingency.
You handle a foreclosure pretty much the same as a regular sale. What part are you confused with?

    Bookmark   October 18, 2011 at 7:15AM
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Carol_from_ny

The only thing that might have made a difference was if you were offering cash and all the others were having to go with a mortgage. Then you could have gotten away with a much lower offer.
Cash in hand almost always trumps having to go the traditional route.

    Bookmark   October 18, 2011 at 11:52AM
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pamghatten

"Its not leaking but workmen at the premises mentioned the roof would need replacing."

So you took the word of some guy working on the house? If I were interested, I would have had a roofer do an inspection and determine the remaining years, if any, on the roof.

    Bookmark   October 18, 2011 at 12:55PM
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maddielee

I still would have put in my offer...if it was a house I really wanted. Those other ' potential offers your agent knew about' may never be accepted.

ML

    Bookmark   October 18, 2011 at 4:56PM
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jane__ny

We were cash. I just heard today that we were 2nd highest offer and the bank would have given it to us because the higher offer needed financing.

I wanted to offer a lower offer to cover the cost of the roof but our agent said that wouldn't fly. So we pulled the bid. When the bank asked if we were still interested, I wanted to say we were, $15,000 less. But we didn't.

I assume its over and we didn't pursue it.

Jane

    Bookmark   October 18, 2011 at 5:48PM
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ncrealestateguy

How did you hear that you were the second highest offer?
How did you hear that the bank would have accepted your offer?

    Bookmark   October 18, 2011 at 7:15PM
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jane__ny

My X-agent sent me an email today.

    Bookmark   October 19, 2011 at 12:05AM
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weedyacres

Why not go ahead and submit a backup offer in case the first one doesn't get financing? Perhaps LITH can recommend a bank for the buyers that will turn them down. :-)

And it sounds like the lesson to learn from this one is to never skip putting in an offer because you think you won't get it. You never know what the seller will do.

    Bookmark   October 19, 2011 at 6:05AM
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jane__ny

I agree with you, weedy, 100%. Unfortunately our agent refused to put in a backup offer saying that couldn't be done. I have no idea if that's true, but he wouldn't budge.
We wanted to pull our original offer and lower it to compensate the cost of the roof. He refused, saying they would laugh at us.

We are now looking for a new agent...#3

Jane

    Bookmark   October 19, 2011 at 8:27PM
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ncrealestateguy

If you never submitted an offer, why was your agent even speaking with the listing agent concerning your non existing offer? And even if he did speak with the LA, why would he come back to you and tell you that he ill advised you, because he just found out that the bank would have taken your offer?
The bank doesn't even know you exist. What would give them reason to say anything about you and your fantasy offer?
This whole scenario doen't sound right.

    Bookmark   October 20, 2011 at 6:51AM
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brickeyee

"Unfortunately our agent refused to put in a backup offer saying that couldn't be done. I have no idea if that's true, but he wouldn't budge. "

Hopefully this is the ex-agent.

He is just lazy and did not want to write up an offer.

Good riddance.

    Bookmark   October 20, 2011 at 11:51AM
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ncrealestateguy

Even the laziest of agents will get off their arse to write an offer...

    Bookmark   October 20, 2011 at 2:31PM
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brickeyee

"Unfortunately our agent refused to put in a backup offer saying that couldn't be done."

"Even the laziest of agents will get off their arse to write an offer..."

It would appear there is at least one who will not.

    Bookmark   October 21, 2011 at 9:42AM
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LoveInTheHouse

Ha ha, Weedyacres, yeah, I can recommend three different banks she can suggest to that first offer! lol

Ooh, I don't like that when an agent says a seller won't take my offer. How do they know?! Even if the seller told the agent her bottom line, that doesn't mean the seller is telling the truth. I always tell agents exactly what I want them to tell everyone else, especially when I say, "This is between us."

    Bookmark   October 21, 2011 at 8:45PM
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jane__ny

Nc, I always feel you are trying to disprove what I write. Maybe I wasn't clear, but I DID PUT IN AN OFFER!

I wrote: "We wanted to pull our original offer and lower it to compensate the cost of the roof. He refused, saying they would laugh at us.

We put in an offer, it was submitted to the bank with the other offers. We heard from the worker that the roof would need to be replaced as soon as possible.

We contacted our Agent and asked if we could pull our original offer and resubmit a lower offer. He said it couldn't be done. I then asked if a contingency be added to our offer requesting the bank replace the roof. He said, they would laugh at us.

It was at that point, I told him to pull our offer.

Two days later, our Agent emailed and said he was contacted by the banks Agent who said our offer was the only cash offer and the bank wanted to know if we were still interested, as there was one higher offer but required financing and they would go with ours being cash. Our agent said 'no.'

I get the impression you think I have somehow made this up or is a fantasy. I can think of better things to fantasize about, one of which is finding a house. I don't appreciate the implication.

Jane

    Bookmark   October 22, 2011 at 1:56AM
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maddielee

Jane, its confusing....in your original post you did not write that you placed an offer.

Later you said that you pulled your bid. Then you wrote that your agent wouldn't put in a back-up offer.

Do you understand why someone may be confused?

I'm in the Tampa area, plenty of houses are for sale. Not all are short sales or foreclosures.

Good luck. I hope you find a house soon, I know how stressful it is.

    Bookmark   October 22, 2011 at 12:03PM
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brickeyee

"We wanted to pull our original offer and lower it to compensate the cost of the roof. He refused, saying they would laugh at us."

Tell then to laugh all they want.

A offer (it is not a contract until accepted and signed by all involved parties) can be withdrawn at any time before it has become a contract.
An offer is NOT a contract until accepted.

I have withdrawn offers wen the seller appeared to be shopping them (now I use short deadlines) or wen the bank (in particular) dd not respond quickly enough (they probably tried shopping also).

I had one bank that delayed over 3 weeks, so I withdrew the offer and months later purchase the property for less than the offer I made initially.

They lost more more by being inept.

    Bookmark   October 22, 2011 at 12:33PM
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jane__ny

Thanks brickeyee, that is what we wanted to do. Either pull the bid and resubmit at a lower amount, or add a contingency to the original bid. This is all new to us and I was relying on our agents advice.

My original question was whether a person could negotiate an offer with a bank. There was a deadline, we pulled the bid and didn't resubmit because we were told we couldn't. I'm still not sure if that was correct, but we lost the house anyway.

It too bad because we really liked the house. It would have required a lot of work, which we were willing to do. But adding a roof to all the repairs, just became too expensive. I guess we'll never know if the bank would have taken our lower bid.

Inventory in the Sarasota area has declined to the point where its slowly becoming a sellers market. The only real bargains are on foreclosures...at least at our price point.

Jane

    Bookmark   October 22, 2011 at 9:23PM
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erinb007

I was in a multiple bidding situation on a bank owned property that I ended up getting. It was not an intentional strategy, but one that I would intentionally do again to see if it worked. My property was, of course, "As Is" but several big things came up in the inspection. I told my realtor I was ready to walk and that she should ask for another 20k off my offer price. She said, "I have never seen that happen, but I will ask." Guess what? They came right back and agreed. By the time you get to the post inspection period, they have invested a fair amount of time/money. To start from scratch with additoinal bids/buyers might take up more time than they want to invest. Realtors always say "People will laugh". or "It will never happen". Never say Never.

    Bookmark   October 22, 2011 at 10:55PM
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brickeyee

"This is all new to us and I was relying on our agents advice."

You really need a new agent/broker.

Someone who actually understands enough about how contract law and RE operate to give you better advice.

It is not exactly 'legal advice' to understand an offer is NOT a contract, and may be withdrawn until accepted by the other party.

There are some specific legal rules about WHEN an offer is considered withdrawn, and for those you should talk with a local attorney.
You need to give formal notice that an offer is withdrawn, but things like notice crossing in the mail with acceptance is one of the issues tat can occur.

Verbal notice followed up immediately by written notice (next day signature required delivery is worth the price) are the start of withdrawing offer.

    Bookmark   October 23, 2011 at 10:25AM
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jane__ny

Just an update. The house mentioned just came back on the market again. Same price.

We switched Realtors shortly after my previous story but have continued to receive his searches. I haven't had any communication with him after notifying him we wouldn't be working with him further. The notice of the house coming back on came from his search. He followed it with an email saying all the bids on the house 'walked.' Most probably because of the roof issues.

I did not answer him but told our new agent to check on the listing. The bank did not lower the price. We plan to revisit the house tomorrow. Our new agent thinks there were probably more problems than just the roof. Being Florida, could be mold issues or rot. Hopefully an inspection would reveal this.

If we decide to go ahead and make an offer, we would go in $25,000 below the banks listing price to cover the cost of the roof. Our agent suggested the bank put the house back on to allow the bidders to factor in the cost of repairs.

My question is, should that be written into the offer? The comments by errin007 was interesting that she informed the bank of the problems and deducted the costs from the offer. I was told that wasn't done and wonder what the usual procedure is. Just submit the offer and wait until the results of the inspection and then withdraw the offer and resubmit?

This house is probably a money-pit. Most foreclosures here (Florida) are a sad state of affairs. This one actually looks better than most but we fear patch-up, cosmetic work was paid for by the bank.

Jane

    Bookmark   October 28, 2011 at 12:46AM
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ncrealestateguy

Once under contract, a buyer performs the inspections. If you like what you see, you proceed. If you do not like what you see, you can negotiate for the repairs to be done, negotiate a lower price, or terminate the contract. Most banks will give you between 7 - 15 days to perform the inspections. If you termiante w/in this time period, you will receive the Earnest Money Deposit back. If you terminate after this Due Diligence time, you lose the EMD.
You do not withdraw and then resubmit.
You may want to communicate with your first agent and see if he is going to expect on getting paid, since he was the Procurring Cause of any sale.

    Bookmark   October 28, 2011 at 5:34AM
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brickeyee

"You do not withdraw and then resubmit. "

Once the contract has been accepted this is correct.

Until the contract has been accepted you are free to withdraw the offer at any time since it is NOT a contract.

If you want to lower the offer withdraw instead of trying to rely on negotiating based on an inspection.

    Bookmark   October 28, 2011 at 7:18AM
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jane__ny

Thanks. The bank allows 5 days for inspections. That is very little time as this house will need a regular home inspection, mold inspection, roofer and survey. Took another look at it today and it needs a lot of repairs which are visible (broken windows, kitchen cabinets missing, broken faucets, electrical issues.

There are permit questions. The house has been vacant since 07, there were complaints with the County regarding abandoned home, pool.

Monday is the deadline for offers. We'll think about it over the weekend.

Jane

    Bookmark   October 28, 2011 at 9:39PM
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ncrealestateguy

Just offer what you think it is worth and be done with it. Either you get it at your price or you do not.
I thought you absolutely did not want to buy a short sale or a foreclosure?

    Bookmark   October 29, 2011 at 11:41AM
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jane__ny

You are right, NC. I didn't and I still don't.

We won't deal with short sales at all. Takes too much time and we have to find a place. Foreclosures go quickly, but you are dealing with a house with multiple problems.

The house is nice (despite the work needed), it is larger than anything we could afford, and it is in a great area. Its an interesting house.

I think we'll probably just low-ball the offer and take our chances. We know for sure the inspection won't be good so we could walk away. We'd be out the cost of the inspection, but it might be worth it. The thing which bothers us the most is the house sat vacant for 4 years.

Jane

    Bookmark   October 30, 2011 at 12:10AM
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GreenDesigns

This low ball offer, it is through your now former realtor, correct? Not your new one?

    Bookmark   October 30, 2011 at 11:29AM
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PRO
Sophie Wheeler

When you are complaining continually about the same thing happening repeatedly with you as the victim, there (hopefully) comes a point that you realize that maybe the problem isn't that thing you've been complaining about. Maybe the world isn't out to get you. Maybe the problem is in the mirror.

The miscommunication you've complained about with your various realtors would seem to be on your end. You don't understand the process. And you will continue to be frustrated with your experiences purchasing a home until you educate yourself.

    Bookmark   October 30, 2011 at 12:11PM
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jane__ny

...."The miscommunication you've complained about with your various realtors would seem to be on your end. You don't understand the process. And you will continue to be frustrated with your experiences purchasing a home until you educate yourself. ""

That's what I'm trying to do by asking here.

Jane

    Bookmark   October 30, 2011 at 7:46PM
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ncrealestateguy

How did your new offer go Jane?

    Bookmark   November 6, 2011 at 7:13AM
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jane__ny

We didn't make an offer. We have decided to look in other areas.

Jane

    Bookmark   November 8, 2011 at 10:09PM
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