** 40% DOWN and my offer was rejected!! **

I have a client that offered almost 10k over asking only 3% down, but still had his offer rejected. He did put an offer on another REO same terms, but got it accepted for 5k under list. It was a much biggeer home and in a better area, so it all turned out good in the end.

It's closing at the end of the month, I'll let you know how it goes. So far I can say that the listing agent is not the best at communicating.

Jim.

I agree with Chad ... if your buyer is a slam dunk, then the offer should have been all cash (even though he is getting a loan) as-is, where-is close in 2 weeks. Price will not be much of an issue at that point.

You will need to show on your offer that you will close in 2 weeks or shorter to gain some advantage with your buyer.

Gosh! Its hard to say without knowing what all the offers had and putting them side by side.  Usually as some have said, they look for the best and then the highest offer.  Instead of the highest and then the best.  They want to close quickly.  Usually 30 days is a good time frame unless it is cash and they will go with 20+ days.  If you had any kind of inspection, they don't like that.  If you had them paying all the escrow and the other offer went 50/50% that would count.  If the other buyer had more money in the bank might look at the stability but I doubt it.  It is just hard to say without seeing both offers.

Maybe you were both pretty close and they took the first one that responded to the counter.  And by the way... I would never rely on what the agent tells you about the other offers.  Agents are taking more of a zip lip on that because of the real estate laws.

Strange starnge. I can't offer any advice but say what were they thinking. My assumption they were not.

I can share with you what works for me, especially since most REOs are underpriced. Pull up the listing agent in MLS and do a search of all that agent's sold listings. Look at list-price to sold-price ratios. Of those, look at the lender on each by pulling up the APN #. You can pretty much figure out how much over you need to go that way. Of course, you can also pull the solds for that area on a map search and compare the ratios, too.

Next, pull the tax rolls to see how much the trustee's deed was for.  Compare that to the original loan balance. Compare those two numbers to the comparable sales.

For example, if a listing agent sells most of his Wells Fargo REOs at 5% over list, then you will probably have to write an offer at 7% over. However, if your buyer is not strong, then you may need to bump up that offer another 3% to compensate. Banks lean toward all cash offers, even if they are a bit less than the highest bid, unless the highest bid is high enough to make up for the potential fallout.

Also, get your buyer preapproved by the bank that owns the property. Run it through the bank's underwriting guidelines and include all those pages with your offer.

Offer 10 days on inspections and don't ask the bank to pay for anything. Offer to split the city transfer tax and escrow fee with the bank.

Dot all your I's, cross all your T's and email the offer to the agent, don't FAX it, including on the cover sheet your cell, fax and email address.

When lots of offers are out there only one can win so the odds are not great.  There are some good ideas in these posts.  Thanks.

Hi Jim:

Some banks refuse to pay transfer tax. It's buried in their addendums. I've also seen some REOs listed that will accept only cash offers. No financing whatsoever. And that's their prerogative.

Bank do know that people grow money in their back yard, which is probably why they want all cash offers they can substantiate. But many of those properties are priced under $200,000. Ah, the good old days. I can remember when you could buy a perfectly sweet rental in Santa Ana for $50,000.

AS far as I've ever experienced, banks are a pain in the ying-yang to deal with! It's no wonder they've got such a huge stock of repos-- they made stupid loans, and deal (or fail to deal) properly with good, strong, solid offers on the repossessed properties when thay get them!