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Last and Final offer called

C

colekicker

Member
So, looking to buy a house. Found one for a great deal and we offered a cash purchase on it. 11 acres, 3/2 on the main with an unfinished basement. Kitchen needs all new cabinets, but that's not a deal killer. Would give us the opportunity to have them our way anyways. It's listed for $174,900, so that's what we offered. It's bank owned. It's last appraisal was $202,000.

Now they've called for last and final. Since our offer went in, there are 4 more offers on the house. So what do you guys think. I know, not looking at the house our where it is greatly affects what someone would offer. It's in great shape and would not need anything other than kitchen cabinets. Any advice?
 
I was teamed up with a Vietnamese woman who just loved making deals.
We bought several houses together, rehabbed them and then resold them.
That woman had a real instinct for making money.
One thing she taught me was in her words "Don't fall in love with the deal"
She explained that houses are just another commodity that gets traded day in and day out.
Don't get emotionally attatched to one - especially before the deal is done.
There are other deals/properties out there, probably even better ones.
So bide your time and keep looking.
Soon enough you'll find the RIGHT one.
That advice has served me very well. Both in real estate and for buying tractors too.
 
I'd agree with you, but it's hard finding a house with some acreage without neighbors piled on top of you. We have a kennel and my tractors and just need more room than the average house.
 
Ultra dog is correct. There's another one around the corner. You don't want to get in a bidding war and have happen to you what happened to my niece.

She, her husband and family recently moved to Norman, Ok. Its a sellers' market. They got into a bidding war and finally won. They offered $38,000 more than the house was listed for. After all the stress, etc., the deal fell through because it turned out there were multiple liens on the property. Now, they have to start over.
 
I think if it was listed at a price and you offered to pay the listed price in cash. You should be moving in! Why are they now asking for more?
 
Odds are someone went above the asking price. Don't get too disappointed if you don't get it.The only advice is raise your bid or keep looking.
 
The others advice is good. However if this is going to be your personal residence and your after a lifestyle I would pay a little more. If it's an investment leave emotion out of it.

11acres and a house of any kind is rare in my area. You can't find that just around the corner.

"Last and final" is typical for bank owned properties. It's designed to create fear of loss to get you to up your bid. IF you really want the property up your bid to what ever your comfortable with. Most people CAN NOT stand to offer asking price let alone more than. I applaud you for your offer.

IF it truly has 25 k in equity some investor or some one who really wants it will offer more than asking.

I bought 40 acres at 3k per acre which at the time was too much, by about 1k per acre. Seller wouldn't budge. It was an investment that other couldn't see. I spent 20k cleaning up, building ponds, clearing right of ways and fixing fence. I expected to hold and enjoy using the property for several years until the market caught up. 4 months into it a guy drove up and wanted to know if it was for sale. I ended up selling it for 6k per acre, cash, and closed 3 weeks later.
 
if you want it then you need to up your bid!
only you have an idea of what it is worth in your area.
More important what it is worth to you.
You said cash, so you know how much you can pay, make sure you have some cushion.
also make sure you get a clear title, not just buying the interest the bank has in it.
good luck
Ron
 
I'm assuming that you submitted your offer, but they hadn't accepted it yet, and meanwhile, more have come in. If that's the case, they're handling it properly for their client, the seller. But if they had actually accepted your offer, its time for a consult with a good real estate attorney to see if you can enforce it. You'll be bound by the terms of your "contract", which is the Purchase and Sale Agreement.

Ultradog is right, if you're in the business of buying and selling houses. But if you're buying one for your personal use, you are allowed (and in fact encouraged) to fall in love with it. Especially if your wife is in love with it, under the "happy wife, happy life" principle.

Now, you just need to decide how much you're willing to go. Give 'em your best number, and don't be a piker, if its what you really want. Remember, $10,000 more on 30 years at 4% is only $47.58 a month, and you'll kick yourself for 30 years if its what you really want but you let it slip away for a few bucks that you could afford to pay anyhow.
 
My niece just bought a house appraised at 180000
for 97000.Real estate people can come up with any appraisal they want.A few years ago you could buy a nice old farm house with 5 acres for around 80000.Then when money became easy to borrow they all went to around 150000 on auctions.Some banks had two or three people getting loans for the same house coming up on an auction.Lots of houses on the market for half the appraisal a couple years ago.
 
Depends on the market.

I know when my sister bought her home in St Louis (actually St Charles) the "asking price" was the starting price. Prospective buyers made their offers with the asking price as the floor - most 10% to 15% more than asking. Most homes sold the day the open house was held - usually with the seller getting multiple offers of varying amounts and conditions and the "winner" being called later in the afternoon to tell them their offer had been accepted.

In my area (NE Kansas) it never got that crazy. I commented to my wife when we bought our last home "Watch this, as soon as we make an offer we'll hear about someone else making an offer too". Within an hour we got a call back asking us if we'd up our offer because they had a "better" one that came in the same day. I told them we'd withdraw our offer if it would help the seller make his mind up - amazing how quick it was then accepted.
 
I found it was cheaper to buy the land and build your own home than to buy existing homes on acreage - but maybe that's just my area.
 
What is it worth to you? You've been shopping, should know.

The listing agent's responsibility is highest and best price to the seller. When they get more than one offer, their job is to play one against the other. Listing price is irrelevant.

I paid considerably more than market value when I bought our land. We didn't have a good backup property, and this one was close to ideal. We had specific needs, which were difficult to find.

If you have another prospect that's attractive, normal to play one against the other. Exactly what the listing agent is doing.

That you made a cash offer could make your offer stand out. The seller will consider the trade-offs if your price is not highest.

Good luck with it.
 
why would a cash offer mean any more than a financed offer... Seller gets a check from the reality company either way. They don't care if you have a loan or pay cash.. They get the full banana when it closes..minus fees, etc etc etc
 
The real question is "what is it worth to you?"

These days, it is very common for homes to sell for more than the asking price. There are a number of reasons for this: Sellers often low-ball the asking price in hopes of a quick sale and to generate a lot of interest. Prices are recovering quickly these days, and everyone whose ever watched an infomercial on "flipping" wants to get on board. Banks are being very careful not to flood the market with foreclosed properties, which creates a shortage since the majority of sales are bank-owned properties.

You need to be objective about the deal, which often is not easy to do. Figure out what you're really willing to pay, and make that your "final" offer. Chance are, all the offers are fairly close to the asking price. And if there is a bid that's way over the asking price, well you're not going to outbid them anyway.
 
From years of experience, I have found that the most important thing is to offer the maximum you will give and make that offer good for a [b:b516254942]certain time--with date[/b:b516254942].
Many years ago, I present a sealed bid on a tractor that was reprocessed by a finance company.
My bid was ridiculously low so I didn't have a time limit.
Finance company called me several weeks later to ask for a higher bid. I asked if they had any other bids and they said they had four. I then asked if my bid was the highest and they informed me that it was but was not high enough.
I told them I had bid my maximum and if it was accepted to contact me.
A few days later they called and wanted me to pick it up.
It sounds like the bank is trying to get more money from you, and if it was me, I would call them and say your offer would not be honored after a certain date.
 
All good advise and to be listened to. Couple of things:
1) Real estate is not usually closed bidding--ask what the highest offer received is.
2) Remember the advantage of a cash offer is that the seller doesn't have to pony up the points for a loan. Points are the banks way of increasing their take. Remind the seller of that.
3) If your offer is the highest stand you ground. In this economy I would be surprised if there were other offers; although the economy is getting better it isn't that good.
 
Most financed offers include a financing addendum, if they can't get their loan at x percent or less, then their offer is void.
 
You know? I don't know if you got a good deal, or not. I honestly don't. This week, A guy that I work with took off to move because he's "short" selling his house and needs to be out by the end of the month. I've heard the term "short sale" countless times and never understood what it means, so here's this guy I work with that is "short" selling his house. I did the obvious and asked, "What's short selling mean?". He told me that he paid something like $250,000 for his home, but with the economy falling apart, its current appraised value is something like $190,000, his monthly mortgage is something like $2,000 or $2,500, and he owes far more on it than its appraised value, so he's selling it at some huge loss that's going to be eaten somehow and somewhere by someone...a "short sale". Now here's the thing. He told me that as part of the deal, someone is eating something like $90,000, and I remember him telling me $90,000, which is going to become taxable income to him next tax-go-round. When he told me that, my suggestion to him is that he better speak to an attorney, an accountant, someone that understands tax law, because from as near as I can make out, in addition to his income, he's going to have to come up with an additional 1/4 or so of $90,000 by April 15, 2015.

So to your question, did you get a good deal? I'm guessing that you probably did, especially if its what you and the family want and wanted, and you can afford it. Congratulations! And for whoever bought my coworker's home, sounds like they got quite a deal too, so congratulations to them.

I sincerely wish you and yours the very best.

Mark
 
Bank owned property is a weird game.
I made a cash offer on one bank owned property that was 20% above
asking price, which made the offer above the actual appraised value.
It was the only offer. They turned it down and sent the property to auction!
I bought it at the auction for about 20% under their asking price.
Don't know what they were thinking, or what I was thinking!
 
If it were an investment property I'd say follow ultradog's advice. Since you want to buy it to live in that's another story.

When was the most recent appraisal? In many areas of the country real estate values are still well below what they were before the meltdown. In my area they're up from the past few years but still 20-25% lower than they were in mid '08.

Do you know that the other offers are actually higher than your first offer?

If the appraisal is a year or less old, then if you really, really want the property then go ahead and make another offer.

Personally I'd probably withdraw my offer. I haven't heard of buyers starting at the asking price then bidding up from there for several years. It sure doesn't happen around here. I think the bank is just trying to squeeze more money out of you.
 
(quoted from post at 15:33:02 05/19/14) Now they've called for last and final. Since our offer went in, there are 4 more offers on the house. So what do you guys think. I know, not looking at the house our where it is greatly affects what someone would offer. It's in great shape and would not need anything other than kitchen cabinets. Any advice?
Click to expand...

Sounds like you have made up your mind so only you can decide what its worth to you. With that said, you should know just because 4 other offers came in, it doesnt mean yours is the lowest. In fact, it could be the highest. The banks will ask for last and final to all 5 offers to see if it changes anything. Around here, a realitor will not tell you what the other offers are, in fact, Im pretty sure thats against the law.

Its also worth noting that although its standard practice to ask for last and final when the bank is ready to cut loose of the property, its not set in stone. They could be asking for a final offer from all 5 of you and still say no sale.

If you are in a position to be paying cash, you could submit a large check for earnest (Think large as in $25,000), no contingencies other than clean title and a 2 week close (as long as your title company can do the work that fast). Make your offer stand out. Heck, if you are all cash, submit your full offer (whatever you decide to pay) with a 2 week close. For banks, cash talks and a short close really turns them on, even though they are never able to follow through that fast. They will delay it but its on them and it works fine. With banks around here, all cash and a quick close will beat a higher offer every time.

Good luck.
 
I think you all have good points but the ONE that I would watch out for is the BANK! They will screw you in a heartbeat. They want you to cover ALL of their cost PLUS their usual markup to come out. But if you want the property, bid what you are comfortable with but don"t let them see/saw you by raising the price every whip stitch. Get your lawyer to read the contract BEFORE you sign.
 
(quoted from post at 18:17:17 05/19/14) why would a cash offer mean any more than a financed offer... Seller gets a check from the reality company either way. They don't care if you have a loan or pay cash.. They get the full banana when it closes..minus fees, etc etc etc
Click to expand...

Because a bank loaning a buyer money can kill a deal quicker than you can imagine... OR, they can kill the deal after weeks of saying everything is great. They do an inspection, a week later they do an appraisal, a week later they start the paper work and finally 4 weeks in, they tell the buyer they wont loan the money. Banks know the games banks play and a selling bank dont want to deal with a buyer that needs bank money because the deal could fall apart at any time. In the mean time, the other 4 willing buyers could have bought something else and then the bank is stuck... again.
 
As has been stated, notify the bank that your existing offer is good until a certain date if the other offers fall through. Advise them that your existing offer is your "best and final" offer.

Of course until that date, you should not make an offer on any other property, in case the bank accepts your offer. The bank may be just trying to get more money from you.

I've done proposals where, as required by the state procurement code, we called for "Best and Final offers". Most vendors did not change their initial offer at all, so then we just accepted the offer that was in the best interest of the state.
 
If you want the house you need an attorney.

If you accepted the sales offer in writing and without conditions, the house is sold.

Dean
 
Sorry Dean, but you have it backwards. He made an offer to purchase, and the seller rejected that offer. No deal, no contract. Seller is under no obligation to sell, and colekicker is under no obligation to purchase.
 
Sorry, Mark, but not true.

If the house is listed for X and the prospective buyer offers X without conditions, the seller cannot withdraw the sales offer.

Offer, acceptance.

Dean
 
It is done every day across the country. If what you say was true, there would be an army of attorneys whose entire practice was dedicated to forcing sellers to sell at their asking price.

In practice, real estate sellers do not make an actual offer to sell. A listing is not an offer, although an offer to purchase at the listed price is usually accepted. But the seller may have any number of reasons not to accept. He may receive multiple offers, or he may have reason to believe the buyer will be unable to consummate the deal. Whatever the reason, a seller can't be compelled to sell without a purchase agreement signed by both parties.
 
If you are single, run like hell.

If you are NOT single, figure the cost of running like hell vs. a divorce.

(Just telling it like it is! There's NOTHING that torques me off any more than agreeing to a seller's asking price, then being told they are going to open up bidding. &#$^^ them!)
 
Be very careful on this - I believe I know which national company you are dealing with. You can possibly get a very good deal, but they require you to participate in an extremely one-sided (not in your favor) process. It comes complete with all sorts of options for them to back out and leave you hanging. Once you sign with them, you are obligated to put up with all their demands and close when and if they decide to close.
 
If the bank has a set of horses in their logo stay away and run like h....l. I got secrewed by them a couple of months ago and went and pulled several thousands worth of accounts I went ballistic on managers and got some of the ways up the regional offices. Pitched a fit to a lot of people!!! DO NOT deal with these a hol..e..s!
 
From the information in the original post, an offer followed by an acceptance is enforceable in a court of law.

Black letter contract law is clear. An unconditional offer to sell followed by an unconditional acceptance enforceable.

That said, no doubt, the seller has made a conditional offer (certainly conditional upon financing, which is not relevant here as the potential buyer made a cash offer). I would expect that the offer to sell is conditional upon other issues as well, likely including no better offers. In mtters of real estate, all such instruments must be written to be enforceable.

Dean
 
How do you know there are actually 4 more offers? They may just figure that since you didn't try to get them to come down that you will actually go higher if pushed. That would be totally unethical, so of course no real estate agent or banker would ever do that, right?
 
Bank maybe doesn't like your cash offer. Can't hook you with all the mortgage fees that way or if it is a certain bank we all know of, they can't screw with you because you have your own money.
 
When a seller puts the property on the market through a broker, he is soliciting purchase offers from prospective buyers. Until the buyer makes an offer to purchase via a "Purchase and Sale Agreement", there is no prospective contract between the parties. Only after the seller has accepted buyer's offer to purchase is there a binding contract, and my understanding in this case is that seller's agent is collecting offers so as to maximize the price. Perfectly legal. Maddening, but perfectly legal.
 
Why would the bank owning the property want the buyer to get a mortgage? Chances are remote that the seller will be the lender (unless they made it a condition of the sale, which is unlikely). And it's pure speculation that the seller is a bank anyway.

It seems that in practice, sellers tend to treat cash and financed purchase offers as the same, even though cash deals go faster and have fewer headaches. It all comes down to how much the offer is and how credible is the buyer.
 
I've written all my contracts so that the earnest money is mine if they can't get their financing in order. I don't need to lose other prospective buyers because some yahoo made an offer they can't make good on.
 
The House is Bank owned. Banks dont like to self own anything. They dont make money that way, Actually they loose money. Dont Bid no more than you are willing to pay. Remember Cash is Always King...
 
So you got mad at the bank and pulled several
thousand in accounts ?????????????
The bank doesn"t care, and was probably laughing
at you as you went out the door. Several million,
yes, bothersome! Several thousand, they probably gave a sigh of relief and were glad to get rid of
your "Peanut" account. Banks don"t care about us
small guys !
 
I offered the listed price. There were two conditions. Termite inspection and subsequent treatment if found and that the survey would not vary greatly than what was listed.

It is simply an offer until the seller accepts the offer. During their time of deliberation, 4 competing offers came in.
Now, according to my agent, if we win the last and final, an offer from a party outside those other 4 could still offer between my L&F being accepted and signed documents returned. What a mess!
 
Would you rather take a cash or a check for a tractor you sell if you don't know the person?

One is guaranteed, the other is just paper until you get your money and there is a match under that paper until the money is in your hand.
 
tough situation.
Normally, after doing my research beforehand without emotion, When I make on offer on anything, that is it.
Call me if you accept, if not, I keep looking.

But, if the wife wants something, I might keep after it.
Money is meaningless compared to an unhappy wife.
Only you can look her in the eye to see....If she really [b:b38597bace]has[/b:b38597bace] to have this one...buy it.

Sometimes, You have to be firm to keep your own options open.
When I bought my camp, in a very high demand area.
The day it was listed, I took a look, offered 1k more than the asking price, cash.
But I told the lister to tell the owners I was actively looking at
all properties in the area and couldn't have my options tied up.
So, here is my written, signed, dated offer, let me know the next day whether you accept or not. They signed it and sent it back the next day.
(Realtor later told me there was 1 list price offer and 3 lower that one day. mine was the only cash, right now, offer)
 
Although it's not the norm, it does happen like this every day. A seller lists the house at a low price hoping to generate lots of interest and multiple offers. A listing is not an offer to sell. After all intial offers are received the seller will go back to all who offered and tell them about the multiple offers and ask for a final offer. Then the best offer is accepted.

It's really no different than sealed bids. You always know there are several bidders but you don't know what they are bidding. You have to decide what you are willing to give and stick with that number. If you get it great, if not then move on to something else. You may be the high bidder now, who knows? The seller may even reject all offers because none received are high enough.

Good luck.

slim
 
Our agent works at the same office the listing agent is at. They will actually get penalized if it sells above the listed price.
 
Under ordinary contract law, once the seller accepts your "last and best", they should be locked in. But what will probably happen is they will condition their acceptance on being able to entertain higher offers until closing. Are you outraged by that? Fine, they'll say, we'll sell it to someone else. So if you want the place, you've gotta hang in there, because they hold all the cards and set the rules.

The good news is, if you win last and best, they'll know they've got a live one, and I can just about guarantee that if any better offers come in, you will be given an opportunity to beat it. They're "all about the money", and until you eliminate yourself from the bidding, they won't know how much further you will go, an will not want to lose you.

And what's to stop them from sending in a straw man to make that better offer? That might happen with a private seller, but a bank has too much to lose (lawsuits, fraud charges, regulators becoming apoplectic, etc.) to risk it over a few grand more. After all, in the final analysis, its not their money!
 
Banks that foreclose very seldom will finance the purchase for the new buyer- the property is on their books as a loss, and its "poison"- they need to get it off the books!

When I worked for Farm Credit, I got a couple of great loans after their present lender sent them my way- the loan got in trouble, but something happened in the meantime to greatly improve it (new management, change in operation, etc.), and former lender was excited about its prospects, but his regulators basically insisted he get it off the books. One turned out (after son took over management and banned scammer Dad from the property) to be the most profitable dairy I ever handled, bar none.
 
Last I heard, the "imputed income" rule had been suspended on short sales of owner-occupied properties. But maybe that has sunsetted, don't know.
 
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