When you complete any Realtor approved real estate offer to purchase, one of the final terms is to identify a time for the offer detailed in the document to expire. In the world of traditional real estate, it is common to use 24 hours for a response. Many agents know that when making an offer on a bank owned REO property they need to build in a longer time. Unfortunately, the perspective of the future owner-occupant buyer, who is accustomed to 24 hour deadlines, is that a 72 hour time frame is giving the bank three times as long to respond to their offer. Many buyers agents do not explain the following point to their buyers.
The "Offer Expiration" term is really only for the buyer's benefit. Sellers of REO homes do not care. In fact, I can't think of a single system we work with that wants to know how long the seller has to respond to the offer. The REO seller might respond in a day, they might respond in 10 days. Why? Lots of reasons that have nothing to do with the buyer. REO sellers assign asset managers to properties. One possibility for a delay in an offer is these asset managers may or may not have the authority to approve or make a counter offer. Such authority may have to be obtained by an actual owner outside of the selling company. These owners often are trustees for the securities that held the mortgage. It is all fairly complicated why it takes time to get a response.
The bottom line is..you have to be prepared for this lengthened negotiation time frame. The delays could cause you to miss out on another opportunity. Often though the patience can pay off. It is just important to go into the offer process with eyes open as to the reality of the response time in the contract.
Other posts in the series "Are You Really Prepared To Buy A Bank-Owned (REO) Home?"
Wilmoth Home
Leave a comment