topic Re: Highest and Final Offer?? in Mortgage Loans

Highest and Final Offer??

Anonymous — Sat, 18 Feb 2012 16:23:00 GMT

I put in an offer on a house last week. Knowing it had multiple offers before submitting mine, I went with asking price without any request for seller paid closing costs. That evening I was emailed an addendum for my highest and final offer... the house was originally listed at $69,900 in October, then reduced to $59,900 (now) 3 weeks ago. My highest and final offer was $64,501 plus I'll pay closing (I don't think it will appraise for more than 63k). I live in Las Vegas were we have a ton of homes on the market but the ones in my price range keep getting sucked up by investors paying cash.

It's a Fannie Mae Homepath property, so they're suppose to give primary buyers "first look", meaning they don't consider any cash offers for the first 30 (could be 45) days...

Question is: Has anyone gone through this process? The listing is now "off market" and pending. I haven't been notified if my offer has been accepted or rejected and

I am now on day 4. What are my chances? and of course, any other thoughts or comments??

PLEASE HELP!! MY NERVES ARE PRETTY BAD!

This home is move in ready with all appliances and basically what I was looking for. Other homes in my price range are looking at 10-25k worth of work and I would have to compromise with not having an actual back yard or a 1 car garage instead of 2 (not too big of a deal but I'm fat... and claustrophobic with 3 kids, 2 that are still in car seats - it would be a pain in the rear to park in the garage ).

Re: Highest and Final Offer??

IOBA — Sat, 18 Feb 2012 19:51:38 GMT

Ask your realtor for a status update. The polite thing for the sellers to do is formally decline your offer.

If the status online in MLS has changed to pending, that sounds like the sellers have accepted an offer and are moving forward.

Fannie Mae is suppose to give home owners the first choice in the first 30 days (in other words, no investors). You can always call Fannie Mae customer service and ask if your offer was accepted. I'd recommend checking with your realtor first.

Re: Highest and Final Offer??

Anonymous — Sat, 18 Feb 2012 20:07:56 GMT

I went to look at other houses with my realtor yesterday and he said that he had not heard any status on the offer. The homes we looked at yesterday, all but one (that had no back yard) were just disgusting... and he said "Hopefully we'll hear something back about the other house soon." I tried to call customer service but it is the weekend and they're closed. I would like to think that they honestly wait the 30 days, but this is Las Vegas and these homes are being sucked up by investors left and right. Cash will always be king...

Re: Highest and Final Offer??

StartingOver10 — Sun, 19 Feb 2012 14:46:36 GMT

I work with/sell a lot of REO/Bank Owned properties.

They always come back with a Highest and Best offer request. This is part of buying a foreclosure. Fannie does actually give preference to the primary homeowner buyer too. Although in our area the preference time frame is 15 days and not 30 days.

Fannie Mae is known to go in and fix up some properties so they are move in ready for the primary residents. It also opens up the market to buyers that need financing. The cash buyer typically pays less for the property especially if they are an investor. Generally investors do not go after properties that are already rehabbed (at least in my area).

If the property is showing pending in the MLS then Fannie has accepted an offer. Have your agent get in touch with the listing office to confirm.

In the case of an REO, the agent typically does not notify any other party other than the "winning" party. Most REO listing agents run their business very differently then what you see in a typical, ordinary purchase. The communication burden is on the selling agent. Make sure your selling agent has a lot of REO experience. Make sure to read the Fannie Mae addendum as it changes the standard contract substantially.

Out of all the REO transaction types, working with a Fannie Mae seller is one of the easiest to complete. There are plenty of FNMA homes. Get on the list of upcoming properties so you know what is coming up before it hits the market.

Re: Highest and Final Offer??

Anonymous — Sun, 19 Feb 2012 15:27:04 GMT

I emailed with my realtor yesterday and we've decided to try for a house that's 3 doors down from the one I put an offer on that is basically the exact same house... just with a different address. That one is a short sale, which doesn't matter much to me. I don't appreciate putting in a firm bid and earnest money and not being respected enough to be told no. It's not as if I tried to low ball. I offered asking price plus no request for seller to cover any closing expenses. For the highest final offer I came back with over 5k more than asking. The house didn't sell at 69, 900... according to history they had a bid in at 65k and it never cleared. The home was then relisted at 59,900 and my offer was $64,501 and I made absolutely no requests towareds the seller. I hope their deal falls through. My offer is being pulled Tuesday morning.

Re: Highest and Final Offer??

Anonymous — Sun, 19 Feb 2012 15:28:22 GMT

towards*

Re: Highest and Final Offer??

IOBA — Sun, 19 Feb 2012 17:28:44 GMT

LondonMassey - I can say I totally understand. I went through a painful experience back in October with a Freddie Mac house. The listing agent did not do (IMO) an honest job trying to sell the house. Long story short, after putting in my SECOND offer (the first offer was not turned in a timely manner), I heard nothing back. Called Freddie Mac a second time -- they never recieved the second offer. Then Freddie Mac (not the realtor) informed me we were in a multiple offer situation and told me to submit my THIRD offer (remember, they never received all of the first offer, never received my second offer, and all of a sudden, they want the third offer??)

The realtor never emailed the NEW paperwork for the "best and final offer" that Freddie Mac wanted. So, I dropped out.

No joke - less than a week later, the price on the house dropped 20k. That was end of October, beginning of November 2011.

Here it is, February 2012 - the house never sold. Freddie Mac finally pulled it off the market. Kinda. Sorta. It's no longer in the MLS listing, but it still has a for sale sign up. County tax records don't show a recent sale.

Yep, I had less than pleasant thoughts towards Freddie Mac after we got jerked around on that deal. I really, really wanted that house. Still do, but my priorities have shifted. Now, I am happy that things worked out as they did for me. So I totally understand why you hope things don't work out.

Re: Highest and Final Offer??

Anonymous — Sun, 19 Feb 2012 18:25:38 GMT

I just don't understand the purpose of dropping the price if there was never any intention on selling it at a lower price. It's just stupid. The other house on the block is a lot nicer though, same model of home, floor plan, etc... but it is painted, has tile flooring, and actual grass in the backyard. It's at 63k as a short sale, so I'm trying to figure out what to do for an offer... I don't know anything at all about short sales.

Re: Highest and Final Offer??

StartingOver10 — Sun, 19 Feb 2012 19:47:31 GMT

Just a little explanation on how these REO properties are priced:

The listing agent works with an assigned Asset Management company. The Asset Manager for that property handles the "seller side" of responding to offers through the listing agent. As to pricing, there are two types of asset managers: 1) the type that prices the property at or around the actual market value and expects full price or close to full price offers; and 2) the type that price the property substantially below market value and expects bids to be much more than list.

This does not mean that they price the properties right. In fact, it is up to the buyer and the buyer's agent to see what the real value is before making the offer. The asset manager's sole job is to get the most money for the property - regardless of the market. When they start dropping prices its because they over estimated the value. I find that Asset Managers over estimate value all the time. They are generally out of the area to begin with so you know more about your area than they do. It's important to remember that when you make an offer.

The Asset Managers also have a variety of marketing methods available to them. They can sell it using an agent and traditional MLS or they can sell it through an auction type process (not the county auction - private auction).

All these decisions affect how they price a property.

As to the Asset Managers responding - they are awful. It really is up to the selling agent to stay in contact with the listing office to determine where the offer is in the process. If your agent is not well versed in REO type listings, they may not be accustomed to the listing office not responding to their email or vm update requests. It is how those type of sales are done. I am not defending it, because I don't appreciate it either when you have an outstanding offer and no response. But, the way around it is for your agent to be proactive.

Re: Highest and Final Offer??

Anonymous — Sun, 19 Feb 2012 20:03:05 GMT

My agent is a great agent... and skilled in REO and short sales. I live in Las Vegas where that's basically all that's on the market right now. The home would appraise around 62k maybe 63k depending on appraiser, so going in at $64,501 on an FHA where the appraisal has to stick with the property for a few months was fair. If they didn't drop the price down to the appraised price, they're kind of stuck with a specific number for a while and I move on to another home. There is absolutely no way the home is worth $69,900 as it had initially been listed.

There is a house 3 doors down currently listed as short sale for just under 63k and is significantly better quality inside. It is the exact same home, just different flooring, cabinets, grass instead of sand in the back yard, pine tree instead of palm tree, and it is painted.

None the less... I'll end up with a house... just hoping the when and where gets figured out soon

Re: Highest and Final Offer??

IOBA — Sun, 19 Feb 2012 22:57:01 GMT

LondonMassey - with the first house I had tried to buy from Freddie Mac - I strongly suspected (and still do) that the listing agent had his own agenda. He was sooo difficult to work with, that even Freddie Mac was calling me directly!

My guess it was a "ploy" to try to get me to raise my offer price. I'd still like to get the house, but only for what I was offering and not a penny more. The house is not worth more money. It's not worth what they are asking for it. Houses that are in move in condition are selling for less than the asking price for that home and it needed close to 100k of work to make it livable.

The price is suppose to drop after being on the market xx of days. This house has been on the market since August 2011 and only experienced one price drop --- after they told me it was a multiple bid situation. FM told me it would be awarded to the highest bidder. Since the price dropped 20k the following week, makes you wonder if anyone "won the bid".

The house still has a for sale sign, never went to MLS status pending/under contract, and is still empty. According to county tax records, FM still owns the house.

The next house I went to, after this one, was a house down the street, short sale. It was much bigger, move in condition, for less money. I put in an offer that I thought was fair for the market. My realtor agreed that my offer was the current market value. I asked for 5k in closing costs. I wrote a personal letter that said it was my best and my final offer. I included a pre-approval letter and along with proof of down payment and my portion of closing funds. My offer was accepted....and I later got out of the deal.

This is what I know about short sales -

1. Offer what is a fair market price for the property. The listing price is usually what the sellers need to clear the loans or darn close. Sometimes they just plan to stop paying the mortgage and call it a short sale.

2. Find out if the lenders involved have agreed to a short sale. Again, sometimes home owners will list it as a short sale but the lenders have no idea that is in the plans. Then the home owner stops paying on the mortgage to force the banks to sell. Sometimes the home owner communicates to the bank and asks to do a short sale even if they are on time with the payments.

3. Typically, with a short sale, the sellers (really the lenders) will pay no more than 3% of closing costs. Be careful of wording. When I made the offer, I said to pay 5k at closing. I could "apply" the 5k anyway I wanted with my choice of words.

4. If it is a lender ok short sale, there will be a "neutral third party" involved. Translation - it's the title company they tell you you HAVE to use for closing. Before you make an offer, check out the title company's reputation, etc. Are they expereinced in short sales?

5. Be prepared to wait. And wait and wait. With my short sale, the addendum was added that said I had to wait 90 full days after the contract was ratified (the offer is made to the sellers, the sellers sign off/or counter). After the contract was ratified on the 91 st day, if I had not recieved a bank approval letter (that said the bank approved the terms) then I could write a letter saying I intended to void the contract. Once that was submitted to the listing agent, the listing agent had an additional 3 business days to get the lender to provide an approval. If at the end of the 3rd business day, no bank letter approval was recieved, I had to write another letter saying i was voiding the contract.

6. Houses are sold as is. Typically no inspection is done, unless you pay for it yourself. You dont' have the option to back out of a short sale based on an inspection.

I'll add more later, if you want. Just let me know.

Re: Highest and Final Offer??

Booner72 — Mon, 20 Feb 2012 00:53:26 GMT

IOBA: Are you still waiting for your short sale?

Re: Highest and Final Offer??

Anonymous — Mon, 20 Feb 2012 00:57:09 GMT

I have 2 houses I might put offers in on both at the same time and see what happens. Just got an email from the realtor that we can go out to look at them tomorrow. One is a short sale and the other is another REO. They're on opposite sides of town, but same distance to work and kids daycare, so I have no preference. Wish me luck!

Re: Highest and Final Offer??

StartingOver10 — Mon, 20 Feb 2012 01:03:46 GMT

To add a little to the post by IOBA above:

Our area is also filled with short sales and REO properties.

Here, in S Fl, it is typical for the current market value to be quite a bit lower than the outstanding mortgage(s). It is not unusual to find market value at half or less than the amount of the mortgage(s)/liens on the property.

Figuring out actual market value is critical to not over paying. This is the thing that takes time, getting the existing lender to accept the current valuation. Some of the lenders fight the new valuations and it does nothing but delay the process.

Buying a short sale takes time. But it is well worth the wait. Since you have a good agent, they will be able to give you the guidence you need. Not every short sale deal can be done, but most of the short sale lenders now have a much smoother process. Even those properties with more than one mortgage can be purchased, they just take a little longer. If you have only one mortgage on the property, especially if its FHA, then its very, very easy to negotiate a short sale. (By the way, FHA will go to as low as 88% of current market value on a purchase of one of their short sales. They also have a fairly quick response once the seller has gone thru the HAFA process). So when you are looking to buy a short sale, if it has one mortgage lien you are in great shape.

Re: Highest and Final Offer??

Anonymous — Mon, 20 Feb 2012 03:39:27 GMT

This will be my first since all this garbage stated. I chose to pursue a short sale. I've done this on a theory.

I had my realtor check to see if there were any second mortgages/liens on the short sale I was interested in. There was only the original financing. No second lien holder has to be pleased in a short sale offering; in my mind, greatly simplifying a short sale process for the first lien holder.

I had my realtor find out if the seller had submitted a short sale package to the lien holder before. She had. The house was approved for a short sale earlier but the new buyer walked for being impatient.

I contacted the HOA for the property I was interested. They could not give me personal information on the current owner but after asking if the HOA had any issues with the property or owner or if dues had been kept current, the President of the HOA was pleased and eager to tell me the current owner “was in good standing” with the HOA. This tells me the HOA has no liens on the property which also makes the short sale process much easier for the lien holder bank’s negotiator.

I’ve read every story about all the finance documentation requests banks are making of people applying for mortgages these days and gathered all this information before applying for a loan. I have a printout of every cash deposit I’ve made into my checking account in the last 3 months. I have my last 4 401K valuation statements. I have a photocopy of my cleared earnest moneys check and on and on like that.

I went to the NAHI (National Association of Home Inspectors) and downloaded the criteria for home inspection then had my realtor let me in the house for 10 hours.

I had a buddy who inspects houses for banks give me a printout of the selling price of every house in the HOA for the last year and made my offer accordingly.

My realtor told me that the earliest I would hear from the bank is 45 days. The latest is 60. Today is 45 days and I know that the lien holder’s bank did an internal assessment of the house last week which suggest to me there is forward movement in my short sale pursuit.

All-in-all, my homework lead me to determine that a short sale will best move in my favor if I look at a short sale without a lot of encumbrances for the bank negotiator to negotiate. This file won’t be put on the bottom of the pile because it is too hard to work on. My homework tells me I needed to make a realistic offer. My homework tells me I need to have an extremely detailed financial package put together and digitalized and ready to go at a moment’s notice. Of course all of this is just theory. I should know if it worked with in 2 more weeks.

Re: Highest and Final Offer??

Anonymous — Mon, 20 Feb 2012 03:42:58 GMT

BTW, I'm in Las Vegas too.

Re: Highest and Final Offer??

IOBA — Tue, 21 Feb 2012 02:44:31 GMT

Booner72 - Nope, I got out of the short sale. The first house was a Freddie Mac house that had the not so great listing agent. Walked away from that since the listing agent was NOT forwarding my offers through to Freddie Mac anyways. Then FM called me to say it was a multiple bid situation and I needed to hurry up and put in my best offer. Highest offer would be selected to purchase the house. Hahahaha. The next week, the house price dropped 20k. Guess there was no "highest offer" and they didnt' count my partial first offer. (The listing agent only submited a price for the house but none of the terms.)

So went for the house down the street that was bigger, in move in condition, and was priced LOWER. It was a short sale. Lots of red flags went up during that long, long wait of Oct/Nov/Dec/Jan/Feb. When the time came, I was able to get out of the deal. Some other things had happened in life, plus all the red flags that went up during the process, and my prorities changed. Received my ernest money back in February. (yeah!)

As much as I would LOVE to have a house, with a kitchen on the main floor, counter top space, and yard privacy, it's not meant to be right now. To unsuccessful house deals is enough to have me take a break.

Thanks for asking!

Re: Highest and Final Offer??

Anonymous — Tue, 21 Feb 2012 05:03:52 GMT

I looked at one of the houses today and I meet with my realtor tomorrow to put in an offer. We're going in higher than asking with no contingencies in hopes to have a chance. It was just listed on Friday, so wish me luck! The kids saw it today and fell in love. It has everything I want aside from 2 things that weren't must haves, only a 1 car garage and only 3 bedrooms... completely able to deal with it though because the backyard, newer build, non-carpet floors downstairs, living room and family room, and has all appliances which makes up for it all. ANDDD it backs up against a street so there aren't any neighbors behind us and the area is totally under developed and given the economy here in Vegas, there won't be anything built around the neighborhood for a while. Ugh. I don't think my nerves will ever get use to this feeling.

Re: Highest and Final Offer??

Booner72 — Thu, 23 Feb 2012 00:52:50 GMT

@IOBA wrote:
Booner72 - Nope, I got out of the short sale. The first house was a Freddie Mac house that had the not so great listing agent. Walked away from that since the listing agent was NOT forwarding my offers through to Freddie Mac anyways. Then FM called me to say it was a multiple bid situation and I needed to hurry up and put in my best offer. Highest offer would be selected to purchase the house. Hahahaha. The next week, the house price dropped 20k. Guess there was no "highest offer" and they didnt' count my partial first offer. (The listing agent only submited a price for the house but none of the terms.)

So went for the house down the street that was bigger, in move in condition, and was priced LOWER. It was a short sale. Lots of red flags went up during that long, long wait of Oct/Nov/Dec/Jan/Feb. When the time came, I was able to get out of the deal. Some other things had happened in life, plus all the red flags that went up during the process, and my prorities changed. Received my ernest money back in February. (yeah!)

As much as I would LOVE to have a house, with a kitchen on the main floor, counter top space, and yard privacy, it's not meant to be right now. To unsuccessful house deals is enough to have me take a break.

Thanks for asking!

I really admire your positive attitude. I'm glad you know that the time isn't right and that waiting is your best friend. Sometimes that is hard to accept, with all the emotions and frantic desperation.

Re: Highest and Final Offer??

Anonymous — Thu, 23 Feb 2012 01:42:09 GMT

UPDATE: Just as I had hoped, the first house was relisted today! (evil laugh)

As I had said yesterday (twice) there was a second house I went to see today and it's great, priced at $59,900 and we went in at $54,500 because it's an older house and could stand to have a new A/C, a small window is broken and needs fixed, I need to install a fence that runs from the house to the block wall in the back of the yard to keep the kids away from the pool (about 14 feet), floors could stand to be redone, new carpet, and tile all areas covered with vinyl. For the condition and after comparing comps, I think I went in at a fair price.

While with the realtor signing the offer on today's house, he was emailed by the house from yesterday that I put an offer in on. They want a highest and final, sent no paperwork, just wanted the realtor to send an email back "ASAP" with an amount. The house was priced at $59.900 and we shot back with $69,200. Again, I don't think it will appraise for that whole amount, probably more like $65-66k, but I wanted to go all in and bypass the games.

I will be happy with either house, both have their perks. I really loveeeee the inground pool at today's house, but I also know with 3 kids, it's more of a liability than an anything, at least until my youngest (3) can swim and my 4 year old is more sturdy on his own. My 9 year old has been on swim team since he was 4, so no real concerns there aside from him cohercing his siblings into sneaking to the pool (double deadbolts anyone?) The other house was built in 2007, so it's only 5 years old and 20 years newer than the pool house. Hopefully only one accepts an offer because I don't really know if I can choose