Anyone Had A Deal Stolen From Them
I just had a strange experience. I made an offer on a house that was foreclosed and listed for $239,000. I offered $225,000....the house was worth at least $270-280,000. My offer was rejected supposedly because and all cash offer came in. I just found out that the bank accepted $215,000. $10,000 less than my offer. I'm stunned by this. I'm going to contact the REO dept at the bank and question them about this. But something seems quite off about this. I'd appreciate any advice. I'm a newbie and this was only my second offer. This particular house sat on the market for 8 months and when i submitted the offer, supposedly someone offered $10,000 less than me and got it. ??????
Any words of wisdom? Is all cash really worth taking $10,000 less for. I have a feeling it was something to do with the listing real estate company, but i'm not sure. Any responses would be greatly appreciated.
Thanks
Yes, in my humble opinion, cash is worth it. I would think that the bank had enough equity in it, and didn't want to bother with a mortgage. The cash sale is a done deal, where a mortgaged deal can always fall apart.
good luck and happy investing.
When my real estate agent submitted my offer he also submitted the pre approval/qualified letter from my mortgage company stating that I was approved for a much higher amount. That should have given the bank some assurance.....I would think.
The listing company didn't even list this property on the realacomp system...I'm told this is the system that all properties are listed on if they are for sale in this area. Also, they had a really small for sale sign in the window of the house. Nothing in the yard. Apparently, no advertising at all. I happened to find the house on one of those foreclosure web sites and had my real estate agent call on it, to take a look.
Cash is always king.
No offense, but I think you're looking to call foul on a penalty that's not there.
Someone else offered an all cash offer at about the same time as your offer. And yes, regardless of any pre-approval letter, etc. cash will win.
A cash closing is usually much quicker with less paperwork, and even with a pre-approved buyer, problems WILL arise. Know this, that nothing will go smoothly with financing involved.
Roger
Just remember this ...
Cash speaks loader than credit..... They will always take cash over paper any day...
I understand your question - and while cash is king there is also an alternate explanation. I think you are asking whether the listing broker even submitted your offer to the seller - perhaps instead submitting one themselves or one from an associate. While I am a realtor - know what - every field has cheats. You might ask your broker to try to find out for you. In Calif during the deal he is only allowed to talk to the listing broker and not the seller, but there is nothing to stop you from contacting the bank and asking them directly whether the offer + bank guarantee letter you submitted to their broker on July 13th for $220,000 was in fact submitted to them. The worst that can happen is that they tell you to bug off.
There could be a number of possibilities on this one:
The bank is allowed to entertain all offers it receives on the properties however, I have noticed that financed deals have a tendency to fall out of escrow thus leaving the property tied up for a period of time. $10,000 really isnt that much when you think about it. If they accepted your offer, you would need 30-45 days to close on the property, if it actually happened and bar any problems. If I were the lender and had the opportunity to cash out of a bad deal, I would take my money and run.
You will be able to check with the county recorder to see who the buyer of the property was. When it shows up run it against the realtor search in your state. This will tell you if a realtor ending up buying it. I have seen this happen before. Dont feel bad about and go milk another cow. There are plenty around
Thanks for all of your replies, I really appreciate them. I'm calling the bank today to find out if they even got my offer. I'll let you know what I find out.
On the foreclosure listing on the internet it listed a particular bank. When I called the bank to verify they received my offer, they couldn't find this property at all. They were very helpful, but it looks like the property wasn't listed with them. How do I find out what bank had foreclosed on this property? Any ideas.
Thanks
Check your county records. Who ever owns the property will be listed.
Roger
I don't how the real estate law in where you live, but where I live, if there are multiple offers, the seller has to take the highest bid. You should check the law in your state.
Hi newby, I had a deal stolen from me once. Boy was I mad. It was a house ARV at 350 and needed only 20k of work. I verbally offered 150 via phone that was accepted.
Well, my realtor stole it. I simply had another realtor check to see who closed on it. Sure enough he did, but for 170! Seems like he wholesaled it to an investor for 20k. OUCH!! Don’t cry over spilt milk, theirs way to many deals out their just waiting for you to snatch em up!
…Anyway, I have a few questions:
1. Was it a verbal offer? If verbal, move on to the next prospect.
2. Did you have a binding agreements? If you have any paper showing your interest, you've got a solid case. It would be unethical for a realtor to steal it then.
3. Did your realtor close on the sale?
I have a feeling your realtor was sleeping on your offer and never actually followed through. A bank would rather have the cash, but if your offer was binding, they wouldn't breach the contract, period.
As for the listing lender not knowing about the property, it’s possible the site that you found the lead never took it off their site after it was sold.
….Web Experts do this a lot to drive more investors in by showing them the KILLER DEALS(that sold months ago). ****Must Reach Senior Investor status before posting URL's*** has hundreds of expired listing sitting on their site. I know this because I wasted a whole day looking at tons of beautiful houses that weren't really for sale. They were sold months before and already rehabbed. I called over 8 listing agents in one day. The only ones available were the ones that were already rehabbed any ready to sell (a lot more then what they got it for).
You must verify the leads before pursuing them. If not you'll waste valuable time. You time should be for prescreening and making offers only!! Train you realtor to find the right deals for you. They should have big spreads and have keywords such as HANDY MAN SPECIAL, FIXXER UPPER, LITTLE TLC, ****Must Reach Senior Investor status before posting URL's***VESTORS, ETC….
….Have them pull comps on near by houses to verify the ARV.
By the way, was that house you were bidding on in excellent condition? If not, you need to spend more time on separating your suspects from your prospects. Never even look at a house until you’ve done your research. Here's a simple yet effective formula you can use.
….(ARV)Actual retail value multiplied by 70% - repair = your maximum bid. For example, a house worth 300k that needed 20k in work.
(ARV)300k times %70 = 210k -20k (for repairs)= 190k(max offer!)
….190 would be the most I would offer. In fact, I would get it for 180, or I wouldn't even get into it. You must always figure at least a %20 profit in order for you to come out ahead. The other %10 goes toward closing costs, holding costs, maintimence, and contingency for buying and reselling.
….If your borrowing the money, you need to add in that expense as well. If you plan on living in it, you can add on another 5%(Cause you won't be selling it) Remember, if you a real investor, you must add in all of your costs, not just what it's worth and what is you acceptable offer. If you use this formula, and know how to inspect a house correctly, you will never lose. If you don't, you waste money, time, energy, and all ambition for the next deal. There are tons of deals out there, don't waste you time on unmotivated sellers!
Along with all the valuable lessons in this specific school of hard knocks, concerning deals being stolen and the reality of it, the techniques for avoiding it as much as possible and all the other insights from the experienced investors, ( such as that Cash will work FOR you, as an investor AND that, although you may find out what happened and be able to use that information - the unknown may still be that nothing happened and the bank just prefered cash, or whatever ),
Your Time May be More Valuable to you if you can " LIG " Let It Go and move to the next deal.
I am not saying, " hey, find us another one to steal" and then Let It Go, too. I'm saying, you aren't going to hand the realtor any more IF there is reason to question them, which means they cost themselves a Fortune- You'll learn more from these Pros on how to protect yourself and establish Your Team Players, ( Realtor, Title Company etc.,etc., that are content with you using them to make their money and that you can trust to not help themselves to your leads).
My point is, I'm sorry. we want our deals and need the money from them, However, after you've learned what you can, There is a Big Value in Not Allowing a Deal Stolen ( or not ? ) to COST YOU A WEEKS WORK !! All the hurt and the questions and confusion and lack of control and natural, "they aren't going to do this to me", ( my words ), stuff is possibly not going to have as good a return on your time spent as Letting It Go and Going On and On and On.
Just one more principle, if it can be of value to you and not original with me. ( it's Bill Twyford's )
Just thought I'd update you guys on what happened with my deal. I had no luck with the bank trying to find out if they ever received my offer. I had to have a loan number and I couldn't find one. I finally decided to email the real estate company that listed the house for the bank. I asked them why they accepted an offer that was $10,000 less than mine. Here is the email reponse I got from them. Keep in mind, my realtor called them on Aug. 27th to let them know that my offer was being faxed over...they never mentioned that the bank had already accepted an offer. Actually, the first time my realtor faxed over the offer, they lost it, so he had to refax it. Here's the realtors response to what happened:
Heather:
We were in a highest and best situation prior to receiving your offer. The bank accepted a $ 215,000.00 Cash Offer on August 27, 2003 based on the three highest & best offers that we had in the office prior to receiving your offer. Since it was a cash offer they may have still accepted the lower amount over your offer anyway. Please feel free to call me and I can explain it better over the phone. Chet XXXXXXXXX ext. xx.
Any comments? My realtor called this company on the following Monday (my offer was made on a Thurs or Fri) and they said they were sending over a few offers with mine. It doesn't sound like the bank made a decision on the 27th like this guy is saying.
One more note. The person that got the house for $215,000 just put it on the market for $269,900
Here is another way to cover yourself, after the deal has been signed and accepted by the homeowner.
A good way to keep the deal from being sold by the home owner to another investor is to file a letter of memorandam on public record so that if they sell to another investor for a higher price, it will cloud their title.
thanks for the tip. This was a bank foreclosed house though. I made my offer to the real estate company that was listing the house for the bank. (They had it way under value. Like I said, the guy bought it for $215,000 and put it right back on the market for $269,000) The only thing this house needed was paint.