Bidding on REO Property

**mpotoczak** · 11-30-2010, 06:33 PM

Hello all,

First time home buyer hoping to get some help regarding the below situation.

An REO property was released through MLS. Viewed it on Day 1 and made an offer for list price ($70k) same day. Seller agent wrote that offers will be taken in the first 7 days. 7th day comes and seller agent lets my agent know 2 other offers were made for list price also. According to what my agent told me, the seller agent would then verbally take one more "best offer" from each party. I instructed my agent to offer $75k. At the time, one party made a counter and mine beat it. One day later, my agent informs me I have been overbid because the last party's offer was "$500 over your best offer."

My agent told me that it appears there's nothing that we can do about it. Is there? The whole above procedure seems very informal and shady to me. Would anyone please provide any advice? Thanks a bunch!

Additional info regarding property: Condo unit in a 50 building. 5 REO / short sales have been made in the past year in the 70-90k range. They sell rather quickly.

**Chrisopher Moltisanti** · 12-01-2010, 05:13 AM

"...At the time, one party made a counter and mine beat it." - How do you know this?

"...One day later, my agent informs me I have been overbid because the last party's offer was "$500 over your best offer." -

My agent told me that it appears there's nothing that we can do about it. Is there?"
-If the selling agent asked for your "highest and best" and that's it, the bidding/ping-pong game may be over.

**Greg** · 12-01-2010, 06:03 AM

Originally Posted by mpotoczak

5 REO / short sales have been made in the past year in the 70-90k range. They sell rather quickly.

Why in the world did you only bid $75,000 when you knew this before you made your offer?

The way you described the bidding sounds very normal and non shady. The only thing done wrong here was you tried to save too much money and lost.

**LondonHomes** · 12-01-2010, 06:42 AM

Originally Posted by Greg

Why in the world did you only bid $75,000 when you knew this before you made your offer?

The way you described the bidding sounds very normal and non shady. The only thing done wrong here was you tried to save too much money and lost.

You can never be happy in a multiple offer situation. If you win you will always wonder how much you overpaid and if you lost you will always kick yourself for not offering that extra $500.

You had a chance to make your best offer it seems 75k was yours 75.5k was the other buyers, nothing shady here.

**mpotoczak** · 12-01-2010, 04:55 PM

Originally Posted by LondonHomes

You can never be happy in a multiple offer situation. If you win you will always wonder how much you overpaid and if you lost you will always kick yourself for not offering that extra $500.

You had a chance to make your best offer it seems 75k was yours 75.5k was the other buyers, nothing shady here.

Thanks for the replies guys! I think I may have been unclear. The reason I'm upset is not that I was overbid, but how I was overbid.

The last offer was NOT $75.5K straight up. From what my agent told me, the other buyer would match any offer by $500, not knowing what other offers have been made. The reason I said it was "shady" was because there's no guarantee this buyer stands firm. Let's say I bid $85K, there's no guarantee buyer will go ahead with the $85.5K. So the advantage the other buyer has is they know the set price, and he/she can choose to accept or walk from it. Again most of the communication was verbal.

My agent's advice was to copy the strategy should another unit come up. Tell the buyer we'll beat any price by $1K or so. If we like the final price, then we take. If we don't, we walk. If really defeats the purpose of "best and final offer" from all buying parties.

If you guys have any other negotiating/bidding techniques, I'd be very open to hearing them out.

**Greg** · 12-02-2010, 05:37 AM

I am surprised your agent knows so much of the details of the other offers and I am surprised a bank accepted an offer with an escalation clause. Usually, this is kept secret.

The problem with this strategy is if you walk from a deal after you win the bid then your chance of having your offer even considered the next time diminishes greatly.