Confused about Back Up Offers on Bank Owned Properties

**MIdreamhome** · 06-17-2011, 04:41 PM

I recently submitted an all cash offer on a fannie mae foreclosure. Multiple offers were received on the home, so it went to a "highest and best". Three offers were received, but one didn't count because it was an investor offer and the home had only been on the market for 8 days. Unfortunately, the bank chose the higher mortgage offer over our cash over. I am completely devastated. My only hope is that the financing falls through on the other offer.... but I'm guess that doesn't happen too much these days as pre approvals are more thorough. The realtor said that if it does fall through, we are "next in line". I have read other places though that a true back up offer is a contract between both parties. Should I insist that we submit a back up offer for approval, or take his word that we will be next in line? I already had a home inspection, so I know it will pass with flying colors. I'm also sure that it will appraise at least where Fannie Mae had estimated it. Is there any chance it will fall through.... and should I insist on an official back up offer? Thank you for any help!

**maui** · 06-17-2011, 07:19 PM

I wouldn't push on the push on the 'official back up offer'. And just because the other offer was accepted doesn't mean that it will materialize. Just because the other buyer was pre-qualified/pre-approved doesn't necessarily translate into the buyer receiving a mortgage. Did your agent advise you to get the property inspected before you put in an offer?

**Sabir** · 06-20-2011, 02:53 AM

That's rights agree with most of your points.. All these really do matter

**tmhayes95** · 08-11-2011, 04:19 PM

Buying a foreclosed property can differ in many ways than other more standard transactions. All offers are contingent on financing and must be accompanied by a pre-approval letter. Some banks require a pre-approval letter from a certain lender, so be sure to read guidelines before submitting an offer. All cash offers require proof of funds with the letterhead of where the funds are being held and the buyers name listed. Actual account numbers can be blackened out, as long as buyers name is easily visible. Write your offer as seller chooses the title company as they have already started preliminary title work on these properties.

All offers must be written offers, on an As-Is contract only Some banks supply addendums in advance, and if that is the case it will be in the MLS as an attachment and should be signed and dated and submitted along with your offer. In most cases, however, the bank addendums are provided only after buyer and seller come to agreement. At that time, the bank will send their bank addendums/counter offer for buyer's signatures. Please note at this point, the bank has still not signed anything, and most likely will not sign until ALL forms have been signed by the buyer. Your offer is considered a pending contract until it is returned from the bank/seller with their final approval. In the interim, all offers that come in must be presented. When signing and initialing a bank addendum, do not alter it in any way or it will be rejected.

The usual time frame for a response to your offer is 3-5 business days, although sometimes a little sooner and occasionally a bit longer. Allow plenty of time for acceptance, and for closing the deal, 30-45 days in most cases.

If you are requesting seller concessions for buyers closing cots, pre-paids, or repairs, make sure those are requested in the written offer, as adding these things at a later date can be very difficult and most times impossible. If you are writing an offer for an FHA or VA purchase, please make sure the property will meet the standards for this type of financing. The majority of the time, repairs are not permitted prior to closing. Ask the lender if they allow the buyer to escrow their own funds for repairs.

Once you have a fully executed contract, time is of the essence. All inspections must be done in a timely manner according to the contract. Should the buyer not be accepting the conditions, written notice must be obtained prior to end of inspection period along with a signed cancellation and release form. Some banks will make earnest money non-refundable after the end of the inspection period. Read your addendums carefully.

Please note that bank owned properties closings are considered mail-aways, because the title companies that are used to close the transactions are usually located out of our general area. Some will send a mobile notary to the buyers agents office to close the transaction and then all documents are overnighted to the title company, but it is not considered officially closed until all original documents and funds are received.