BANK OWNED OPEN BIDDING
So my buyer sees a home on line that she has fallen for and wants to make a bid. We go on to the bank's site and register at Ocwen.com and make a bid. Low and behold I click to the right of the screen where it says, "other bids" and we are able to view every other bid that has been offered and what their net is....hummm... There is no close date in which they mention they will stop bidding. I phone my buyer and tell her we need to go a tad bit higher as there is another bid slightly higher than ours. Thus, we do. The next morning I open up my emai and we are sent automated email that was generated congratulating us on acceptance of the offer, in other words; We won the Bid! We have 24 hours to respond. I phone my buyer, she comes in immediately and we reaspond to the Addendums that were sent to us. My buyer is entirely excited and wants to do the home inspection right away. I phone the listing agent a few hours later and tell her we want to schedule a home inspection in the next few days. She replies, "you are not the winner of the bid" to my surprise. She then goes on to tell me she was also sent the same email for her own buyer and then the bid was given to me, who was then later beat out by another offer of over $30,000 more than my offer. WHAT??? I phone the bank and yes, to my amazement they did cancel my acceptance, without any warning and the bid was given to someone else. To this day, I have not been sent any confirmation of that event in writing.
The identical situation just happened once again with the same bank. My my question is: How fair is this type of bidding and what is the message the banks are sending to these consumers. The Addendums contain tons of ways the bank or seller can just cancel an accepted offer. Contract law says you can write anything you want into a contract, however it has to be "legal" or it is void. How can the Bank, who is actually just another Seller control a contract the way that they are within this market - taking away the many ways consumers were able to get out of a contract, and flipping that to the Seller's opportunity to just take a higher offer at anytime? These Addendums are full of pitfalls allowing the Seller to just say, "I changed my mind", when contract law had given the "free-look" period to the consumer not the buyer.
Banks are holding out for the highest possible bidder and then accepting bids far above the market value or appraised value, leaving FHA buyers in the dust once again! Isn't this just how we got into the mess in the first place? My only conciliation is that the buyer will have to come in with quite a bit of cash in order to make up the difference with cash when over-bidding on these properties, and at least they may not be so upside down. I mean, well, the homes are usually fixer's that get onto this system and they still have quite a bit of work ahead of them before they are comfortable enough to move into.
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