Thread: Can't seem to buy a home - why?

it really takes time because there are many things to analyze and consider.

Originally Posted by jbobst

My wife and I are finally able to consider buying a home and quit renting (due to the housing prices finally coming back down to reality). The problem is, we have been trying for about three months now to buy a house, and we just can't seem to make any headway! We seem like the perfect buyers...in the sense that we have a 25K down payment, excellent credit, and all of our offers are very "clean"...meaning that we aren't asking for anything of the seller. We live in the Phoenix area, specifically in Gilbert, and are looking for a house in this area between the 200K and 225K price range. There are seemingly hundreds of short sales and bank owned properties available, and we have about 9 offers outstanding on various homes at the moment...all either bank owned or short sales. The problem is, the banks are totally unresponsive to our offers and we have been told it could take up to 60 days before we hear back on some of our offers. One of our offers was finally responded too after a couple of weeks waiting. This one in particular was finally countered by the bank (it's a bank owned, not a short sale) and we are hopeful they will accept our returned counter offer, but we are still just waiting and waiting.

Any home that is for sale by a "real person" seller (meaning a real person/family trying to sell their home, vs. a bank owned or short sale) is simply about 50K+ MORE than the price of the bank owned homes. We would love to deal with real people trying who are trying to sell their homes, but they simply won't lower their prices. While it is frustrating to wait on the banks, we aren't in that much of a hurry to buy a home, and I can't justify paying 50K more to a "real" seller than a comparable home across the street that is bank owned.

My specific questions are, WHY are the banks taking so long in responding? All of the Realtors who are representing the banks or short sale properties tell us we have the cleanest offers, and in many cases we are offering quite a bit MORE than asking price. If this is such a good time to buy, and since there is so much inventory out there, why can't we seem to buy a home in a reasonable time frame?

My last question is in regards to our Realtor. I really like the guy, but he keeps telling us that we need to put our initial offers in thousands of dollars HIGHER (in some cases) than the asking price. We have done that on a few homes, but why wouldn't we start at their asking price and then at least hear what they have to counter with? Then we have some room to counter with a higher price maybe. I think maybe their asking price is simply to low and they are seeking out a multitude of offers, but it just seems like a crazy way of bidding on homes. Our realtor keeps wanting us to put our first bid in at our maximum price...even if the asking price is 15K (or whatever) below our maximum price. Is this really the best strategy? I feel like we are showing our hand at the beginning of the game, instead of trying to get the best deal. How do other realtors handle all these short sales and bank owned homes? How do we actually get one of these homes? Is it adviseable to make your very best offer up front, even though it could be thousands of dollars more than their asking price? Is it just a really long waiting game?

Short sales and REOs have tons of people that have to review and sign off on the deal to make it legit. Your agent can help speed it up if they request to present it in person to the loss mitigation expert themselves. He wont always be able to this because they often times say no, but it can really help your situation when they allow it.

Most short sales and REO's do not sell at the list price. They use a low listing price to get a multiple offer situation. These homes almost always sell for more than list unless they are in really bad shape. One thing about your agent bothers me. You should ask your agent why he is not using an escalation clause as part of the contract? An escalation clause is a addendum to the Purchase and Sale Contract that states that your offer price is such and such but that you will raise it to be $500 above any other offer that comes in up to (insert maximium price). By using this clause you in effect are making your highest offer but still holding on to your cards.

Another thing you can do to impove your offer is get a loan approval not just a pre qualification. By doing this you can feel more comfortable in not making your offer subject to obtaining financing. Just be careful using this strategy.

I wish you luck and if you have anymore questions just shoot me a direct message.

wow 60 days, I can't imagine the stress that causes, I don't have any bank that takes more than a week to respond to an offer and if they do I can ask for some sort of update, I know the banks are running behind but that is on the prelisting side..
I only list foreclosure properties and I always suggest for my buyers, no matter what kind of home it is, go home and think of their minimum and maximum price range and we of course will start at the minimum unless it is a property that I know is PRIME and will go within days of listing. If this is the case the listing agent including myself will ask for highest and best offers from anyone, that is how you will know for sure there are multiple offers..if you're not being told this is the case why would your agent want you to bid at your highest?commission? if you're the only one making an actual offer why would he suggest you come in at thousands over the listing price..I would question this big time.
I have not sold a property listed by a private seller in years because in an REO driven market they typically are still playing the stubborn game and not lowering their price inorder to compete so they just sit there for over a year..no point in wasting my time unless a buyer is THAT in love with the home.
If you're not happy with your realtor why not try the listing agent who actually has one of these homes you might want to make an offer on.. If you're not lowballing unreasonably there should be no reason you cannot get a home in today's market especially an REO and when you're th eonly one making an offer. The banks are trying to get as much as they can back right now without putting much out for repairs or concessions, in my market it's common for the banks to pay the 3-6% concessions to buyer as well as some sort of repair allowance if the offer is close to full listing price with very little argument. In fact right now I'm dealing with a bank who is suspicious we underpriced a property when an offer came in within days at full listing price, go figure

The general cause of the delays is that banks are big bureaucracies and they want to make sure they are getting the best deal that they can. Depending on how large the mortgage was that they foreclosed on, they may be losing a substantial amount of money on the deal and of course banks don't like to lose money.

I know how you feel... My wife and I have been looking for 7 months now and have put offers on more than 10 homes. We are at the point now where we may just have a home built and not have to deal with the BS.

Good luck!

i hope your agent is showing you comparables.

Sometimes this process seems to take longer than it should. I wish you the best of luck and keep us updated or post other questions here if you need anything.

there are lots of things to consider... so it will take time

First the answer to all this will vary.
Youi are most likely making a lot of offers with no results.
Here in Orange County Cal many of the Foreclosures are getting multiple offers. The banks are undercutting the market, and the foreclosures should be cheaper, you take a lot more risk in buying one.
If you are making FHA offers your agent is telling you to make the offers high in order that they will take our offer. Foreclosures do not want to do repairs and FHA requires repairs. The money for those repairs either must come from you or the seller, who would rather not sell to an FHA buyer.
Also if you are getting down payment assistance the sellers do not want to do that either. So by offering more than full price you will have a chance at getting it.
Try offering full price and asking for concessions, you will still have to make a lof of offers but you should get some bites.