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You Can't Steal Something Slowly!

By R. B. "Bob" Mitchell - Loan Officer Raleigh/Durham

Mortgage and Lending with Bank of England (NMLS#418481) NMLS# 1046286

March 19, 2008 10:23 AM

Last week I was showing property and came across one that was a foreclosure and that was priced to sell! Even in this stealing quickly market, it was considerably below the market, so we wrote on it. The bank required a 5 day answering time on the contract, which I didn't like at all. The reason that I didn't like it is that you can't steal something slowly!

Sure enough, after we wrote several other contracts came in and the bank successfully "shopped" our contract and accepted one for more than the asking price. Needless to say, my clients were disappointed.

I'm going to keep an eye on this property though because for some reason I think that this contract is going to fall through. Considering the work that the property needed, my client's offer was indeed pretty reasonable. Something tells me that the buyer is either paying too much for the property or plans on playing a game back on the bank. I have no reason to think this, other than my gut, but we'll see.

Anyway, my main point here is that if you are out shopping for a home and do come across a deal, don't mess around. Even in this market, if it's priced right, it will move!

Bob Mitchell

ValueList Real Estate Services, Inc.

Bob Mitchell is president of ValueList Real Estate Services, St. Louis' largest discount/full-service real estate and mortgage company. If you would like to find out more about Bob, ValueList or our flat-fee listing program, please feel free to visit our web site at valuelistre.com

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Deb Jamail

HomeLife Southern Properties - Galveston, TX

Galveston County Real Estate

You are so correct Bob!! Sometimes you can't move fast enough

Mar 19, 2008 10:30 AM

Jonelle Simons

Windermere Real Estate - Park City, UT

Yea, REO can be a pain... and that's their strategy. Price it low and start a bidding war.

Mar 19, 2008 10:30 AM

Chuck Carstensen

RE/MAX Results - Elk River, MN

Minnesota/Wisconsin Real Estate Expert

Those are painful. Not much you can do. Keep at it!

Mar 19, 2008 10:34 AM

John Karadsheh

KOR Properties - Mesa, AZ

ABR, CRS - REALTOR - Mesa, Arizona - Las Sendas

Bob,

REO can be a pain, but 5 days to respond is actually pretty resonable considering some banks want as much as 1 to 2 months to respond.

Also you said

"that was priced to sell! Even in this market, it was considerably below the market"

Then you said

"Considering the work that the property needed, my client's offer was indeed pretty reasonable."

Either it was a great deal or it wasn't, not sure which one you really think is was......

Mar 19, 2008 10:38 AM

Kris Wales

Keller Williams Realty - Lakeside Market Center - Macomb, MI

Real Estate Blog & Homes for Sale search site, Macomb County MI

Bank owned homes are a test in patience. I've learned that and really try to glean from my buyers whether they are "up to it". For the most part they are. They are also quite challenging, almost like a poker game aren't they?

Mar 19, 2008 10:46 AM

Don Rogers

Keller Williams Realty Chesterfield - O'Fallon, MO

Realtor, Broker, CDPE, GRI, OnullFallon MO & St Charles County MO homes

Bob, I think that the we will never be able to figure out what the banks are going to do. Just about the time you think that you have them figured out they will do a 180 on you. The bank that I deal with wants a 2 business day response time and even with that there are offers that come in after another one is on the table. Always ask the agent if there is another offer on the table. If not there's not much you can do if one comes in. I feel your pain.

Mar 19, 2008 11:03 AM

Gary Woltal

Keller Williams Realty - Flower Mound, TX

Assoc. Broker Realtor SFR Dallas Ft. Worth

I've heard that similar line Bob that you can't steal in slow motion. Great properties do move. They always have.

Mar 19, 2008 11:27 AM

Debbie DiFonzo

Debbie DiFonzo - United Country VIP Realty, SW Missouri - Lebanon, MO

Lebanon MO and Buffalo Missouri Real Estate

I've never seen the five day acceptance before. But I have seen "No offers accepted until day 11 of property being listed" or something to this effect. I think they make up the rules as they go along -

Mar 19, 2008 11:31 AM

Todd and Danielle Millar

Glenn Simon Inc. - Edmonton, AB

Nineteen years of excellence!

Oh well we all miss sweet deals like this. Maybe the next one will be even better. Great strategy by the banks though to start a bidding war.

Mar 19, 2008 11:44 AM

Dionne Bass

Ask The Underwriter - Atlanta, GA

Blog: Ask The Underwriter

I've been reading your post for a month now, I'm sure you'll find them another great deal!

Mar 19, 2008 02:10 PM

R. B. "Bob" Mitchell - Loan Officer Raleigh/Durham

Bank of England (NMLS#418481) - Raleigh, NC

Bob Mitchell (NMLS#1046286)

Deb, Jonelle, Chuck, John, Kris, Don, Gary, Debbie, Todd&Danielle and D., thanks for the comments. It did suck to lose this one, but my clients made the best and final offer when we were notified that there were other contracts, so they are not that disappointed.

I guess what bothers me is that I do feel a bit like we were played. I know that in negotiations that "he/she who cares least always wins - works in love too, by the way - but, I can't help but feel that the five day answering time was for the purpose of shopping the offer.....as you guys pointed out, that seems to be the way that the banks work and so far it did seem to work for them, so what can I say?

John, to clarify what I meant, the property had quite a few rough edges. If you added the cost of correcting these rough edges to what my people offered, then, if their contract had been accepted, they would have ended up with probably about $7,000 to $10,000 worth of equity in the property. Considering the as/is nature of the sale, as well as the deferred maintenance, I thought (and so did my clients) that $7,000 to $10,000 was fair compensation for the risk, as well as the time and effort they would have had to put into the property. Hell, to me, just putting up with the one sided nature of the way that the negotiations were structured should have been worth at least a couple of grand!

Looking at the property, I was comfortable that a professional speculator wouldn't have out bid us, so I'm thinking that it was somebody buying the home for themselves. All things considered, if they want to take on the risk involved in buying a property that obviously showed signs of neglect and downright abuse, as well as either paying for the correction of the deferred maintenance (or the work involved to do it themselves), then more power to them. I didn't blame my people at all for sticking to their offer. I hope that makes sense?

This one wasn't meant to be! Back to kissing frogs! Again, thanks for the comments!

Bob Mitchell

ValueList Real Estate Services, Inc.

Mar 19, 2008 03:17 PM

Jimmie Graham

Keller Williams Realty - Ypsilanti, MI

I had my first bank deal which took me a week and a half to hear if the offer we made got accepted. It's a pain but if your client has patience. Go for it. Although I've came across some banks that will respond quicker. It depends

Mar 20, 2008 02:23 AM

R. B. "Bob" Mitchell - Loan Officer Raleigh/Durham

Bank of England (NMLS#418481) - Raleigh, NC

Bob Mitchell (NMLS#1046286)

Jimmy, I guess that if the deal is a good one that it's worth the hassle and aggravation, but it still sucked!

Thanks for the comment!

Bob Mitchell

ValueList Real Estate Services, Inc.

Mar 20, 2008 03:05 AM

Jacob Webster

Sagamore Home Mortgage, LLC. - Zionsville, IN

Indiananulls Senior Mortgage Consultant

Bob, You hit it right on the money. In this business time = money! And to much time = lost deals. Great blog post.

Mar 20, 2008 03:14 AM

R. B. "Bob" Mitchell - Loan Officer Raleigh/Durham

Bank of England (NMLS#418481) - Raleigh, NC

Bob Mitchell (NMLS#1046286)

Thanks Jacob!

Bob Mitchell

ValueList Real Estate Services, Inc.

Mar 20, 2008 09:43 AM

Adam Waldman

Westcott Group Real Estate Company - Hauppauge, NY

Realtor - Long Island

BOB - Great advice. I think that buyers have become wary of making offers "too soon," when in fact, they are often times "too slow" if a home is truly priced to sell. Bidding wars are still going on to this day.

Mar 20, 2008 09:45 PM

R. B. "Bob" Mitchell - Loan Officer Raleigh/Durham

Bank of England (NMLS#418481) - Raleigh, NC

Bob Mitchell (NMLS#1046286)

Hey Adam....I would have never expected it, but you're right. This turned into a bidding war...even in this market and while I don't know what they ended up getting an offer for, it was likely higher than the property was worth in my opinion.! Thanks for the comment!

Bob Mitchell

ValueList Real Estate Services, Inc.

Mar 21, 2008 02:38 AM