Lots of Offers…

November 15, 2011 · 3 comments

I’ve had a few people ask why we haven’t picked up any new houses in the past couple months…I assure you, it’s not for a lack of trying…

We currently have offers in on 6 properties that we believe we have at least a reasonable chance of getting under contract (we don’t submit a whole lot of offers, but have about 35% success rate in getting properties under contract when we do). Unfortunately, the sellers/banks have been very slow to respond to our offers, so we’re in a holding pattern waiting to find out if we’re about to have a lot of properties, no properties, or somewhere in-between.

Normally, we get responses to our REO offers within a day or two (and if not a response, at least a status update); these days though, it appears responses are taking up to a week, if not longer. Perhaps it’s the time of year, but asset managers don’t appear to be too eager to sell their inventory.

Hopefully we’ll have a couple houses to talk about in the next week or so…

3 responses to “Lots of Offers…”

  1. Don Hines says:

    I have noticed some homes I made offers on last Fall are back on the market. A couple of them I felt I lost to other investors or OO’s. They are asking more this year than last year.
    Good Luck

  2. Michael says:


    I recently put a cash offer in on a foreclosure with a 7 day inspection period, and close in 2 weeks. The seller countered with 0 inspection days, saying that they don’t allow for an inspection period because they prefer for them to be done before a binding agreement. We are still pretty far off on price but I was wondering if this is a common practice to not allow for an inspection period? Have or how would you deal with it?

  3. J Scott says:

    Michael –

    Great question… While most of the big banks these days are okay with inspection periods (in fact, Fannie Mae and others will give you 7 days even if you don’t ask for it), there are a few banks that don’t like to give inspection periods, as they know there is a greater chance of the deal falling through. Personally, I think that’s just part of the business, but they would rather turn away buyers earlier in the process than to have the buyers walk away during due diligence. When dealing with one of these banks, you essentially have two choices:

    1. Do your inspection prior to submitting your offer. This will cost you some time and money, and given the slim chances of getting a particular REO under contract, will likely waste a lot of your time and cash;

    2. Here’s what I do in this situation — the day you get a verbal acceptance from the seller, you generally have 2-3 days before you’ll get all the contract addenda and have to sign and return them. During this 2-3 day period when you know you have the property locked up, do your inspections and due diligence. You probably won’t be able to turn the utilities on, but you can still do a lot of the inspection work without the utilities and at least get a good idea of what the property needs. If, during that 2-3 days, you determine that it’s not a good deal, you don’t sign the contract addenda and the deal falls through — but you don’t lose any money.

    Btw, if you do #2 and end up backing out of a couple properties, it could certainly hurt your reputation, so be careful. You shouldn’t make a habit of backing out of a deal after verbal agreement…

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