Advice needed on buying foreclosed house
Question: We (and about 20-30 other people) have put in bids on a foreclosed house here in California. Though we’ve bought homes before, we’re still somewhat unfamiliar with the rules of this game, and would appreciate any insight or suggestions from anyone who’s been in this type of situation before.
All bids are supposed to be final and best offers. The bank will evaluate all of the offers, and will then respond to one (or more) offers. No counteroffers will be made; the house is, of course, being sold as-is. The house and grounds require at the very least substantial cleaning, caulking and cosmetic work, with the structural/electric/plumbing systems a big question mark prior to full inspection, but no problems immediately visible.
My wife has (stupidly, she agrees) fallen in love with the house, even though she realizes that the odds are that we won’t get this one. I’m trying to be the cynical one this time out.
If our bid is enough to advance us to the next round of the game, how common is it for the bank to set up a bidding war among the top offers? What can we or our agent do in such a situation, aside from increasing our bid, to make the bank smile more favorably upon us?
Or is it more likely that the bank or the listing agent have already hand-picked a buyer, and this seemingly public listing is for form’s sake, only?
Answer: The bank’s job is to get speedy resolution of the matter for the maximum amount of cash. They aren’t a real estate management company, and they want to unload the house. However, they have a duty to get reasonably the maximum amount they can for it. I would imagine fairly unlikely. The bank wouldn’t sell a house for $50K to a hand-picked buyer in the face of an otherwise equivalent $60K offer from you. However, the bank is not bound to accept the highest offer, but could accept a $50K cash offer instead of a $55K offer that required seller-financing, or had contingencies. s
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