Friday, January 15, 2010

Delayed Response on Offers: What Should A Buyer Expect??

Question: We found a house, made an offer and gave them a deadline. But, the listing agent hasn’t given us an answer. The agent is telling us it is a foreclosed home and he can’t get in touch with the bank to get a response. Is this common?

Answer: First, you mentioned a listing agent but no agent on your side.  I am assuming you are not represented by your own buyer’s agent, which puts you at a disadvantage.  Still, it is hard for me to believe that an agent cannot reach their client on a bank-owned foreclosure property.   Some human gave this agent the listing and that human can be reached. However, banks usually only work weekdays and may not be reachable on weekends or holidays. This could explain delays especially at this time of the year.  The listing agent should be able to communicate the amount of time expected for a reply prior to making the offer.

Regarding your deadline, in Tennessee and Georgia, all written offers must be presented to the seller in a timely manner.  However, the seller is under no obligation to respond at all or according to your requested time frame in the offer.  You may state in an offer that a response is needed by a certain date and time.   But, there is not a “rule” or “law” for the seller to abide by the response time stated in your offer.  This time limit is in the offer for the buyer to establish when their offer will expire and, in other words, off the table.

In the case of bank-owned properties, they are dealing with lots of properties and offers.  I know you stated you gave the bank a deadline to respond to your offer.  If your offer price was not high enough, they may have no motivation to consider it in light of the other offers they are dealing with at the time.

Ultimately, it is the buyer’s job to get an offer together that a seller is willing to consider.  Otherwise, the bank’s asset manager may simply work on more pressing matters and, in effect, procrastinate while increasing the chances they will get another offer on the property you want to buy.  My guess is that if they were convinced you were their best option – you would get a response.  This is where I spend a good bit of my time these days – making the case that my client’s offer is their best option.  The research is exhausting, but necessary. My clients need to know the real value today and at what point they should walk away or when to be patient and wait.  I can usually paint the picture that my client’s offer should be acted upon in a timely manner or we will be forced (by them) to go find something else.