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Dealhunter
Posts: 20
Registered: ‎04-16-2008
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**How long does bank take to sign REO contract**

My offer was countered by the REO Asset manager which I accepted via email to my realtor who had forwarded me the "computerized" email counter. The counter was formalized into an "Addendum A" document that seemed to have been prepared by the Asset mgmt company. The addendum was sent to me unsigned by the asset mgr. I signed and returned the Addendum about a week ago. So now I am waiting for the documents (original offer addendum) to be signed by the Asset mgr and bank and returned to me as an "executed contract". I need your opinion on this situation. Is it normal for the bank to take this long to sign and return a fully executed contract?Loan approval/appraisal/inspection r done.Could the bank "change it's mind"/ proceed with the sale/change terms at this stage? "Technically" they could but could it happen as a practical matter in your experience? Is this delay (1week+) by the bank in executing the contract unusual? I would especially like to hear from those with 1st hand experience in REO purchases although all are welcome to opine.Thanks in advance.
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luckydogz
Posts: 287
Registered: ‎05-23-2008
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Re: **How long does bank take to sign REO contract**

I got my reo from citibank in july and from time of offer to counter-offer to acceptance then initiate escrow - that all took a little over 1 week
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Sean_S
Posts: 2
Registered: ‎10-17-2008
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Re: **How long does bank take to sign REO contract**

Among other things you asked : "Is it normal for the bank to take this long to sign and return a fully executed contract?"

 

The "contract" you described is not a contract nor is it "fully executed" -- both parties must sign for there to be a fully executed contract.  What you received back from the bank was an unsigned document not legally binding on the bank but probably binding on you as an offer because you signed it. What if anything did the document say about time to accept or reject?  What if anything is your realtor doing?  Does your realtor represent the seller/bank? If so, that explains why you received an unsigned "counter".  The bank can do anything it wants to do as it hasn't executed anything.

Regular Visitor
spongebob
Posts: 8
Registered: ‎10-18-2008
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Re: **How long does bank take to sign REO contract**

I had made an offer on an REO back in June of this year.  The asset manager had accepted my offer and all the paperwork was done with my sig. except for one thing, the bank's sig.  Well, we waited one month for the bank's signature.  During that time, our contract expired and we had to write a new contract so we did and  we signed it again.  We heard from the listing agent that they were going to sign it faster this time.  About two weeks later, the bank still hadn't sign it.  The bank was Fannie Mae and we were told they were really really busy.  Maybe the staff was too depressed to get the paperwork signed because shortly, it was announced that Fannie Mae was taken over by the government.  Well, we were upset  it was taking so long but we knew that it would get signed eventually so we waited until something nicer came along and we called off our side of the agreement and decided not to go through with the purchase.  That same REO property we decided not to purchase stayed on the market for another 4.5 months and we watched the price go down lower than the price we had agreed on in June.  We're happy the new owner got such a great deal.  I personally like working with REO's and that experience didn't faze my opinion.  REO's can be wonderful deals and like everything else worth waiting for, you just have to be patient.
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Dealhunter
Posts: 20
Registered: ‎04-16-2008
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Re: **How long does bank take to sign REO contract**

Spongbob, do you know if the REO actually sold after all those months? Did Fannie ever actually sign? I am just wondering what the worst case is - long delay? or can it be to the point where the bank never follows through?
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Jim-Holt
Posts: 26
Registered: ‎07-31-2007
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Re: **How long does bank take to sign REO contract**

While working with buyers on REO properties, generally the bank takes about 1 week to return all the paperwork signed.  However, I have seen it happen as quickly as 2 days, but I also have had one transaction where it took the bank about 2 1/2 weeks to get the contract back signed.  Each bank varies. 

 

Bank owned properties are handled very differently in that most listing agents input the offer into a computer system which is transmitted to the asset manager at the bank.  They then respond via the same system with a counter offer.  All counter offers are done verbally.  Once agreed to verbally, the listing agent writes up the counter/addendum and gives to the buyer to sign prior to the bank signing it.   They send the whole package via mail to the bank to sign.  Some banks are quick; others are very slow, unfortunately. 

Jim Holt | Redfin Team Lead Agent
See all my deals & reviews
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underdog
Posts: 4
Registered: ‎05-07-2008
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Re: **How long does bank take to sign REO contract**

The listing was inactivated this month after they lowered the price a second time-- a little lower than the price we negotiated 4.5 months ago so I would assume Fannie Mae has signed the contract or will soon. I doubt that they will take as long  this time to sign the contract because they saw how prices have been dropping.  They lost thousands of dollars since they have to pay the HOAs and taxes all these months the home was just sitting around empty and all this makes the asset manager look really bad. I think our experience wasn't normal at all. I think most banks will sign the contract once you have a negotiated a price and have made a deal. I don't know how long the average time it is for a bank to sign it but I do know that every bank is different. Some banks are just more experienced or more efficient than others when it comes to REOs.  There are a number of factors like how many REOs they are handling at the moment, how big their staff is, and if they have a system in place.  You can ask the listing agent to remind the bank to sign the contract so he puts some pressure on them but sometimes that won't have any effect on the bank.  If they are overwhelmed, they are overwhelmed.  All you can do is wait a reasonable amount of time and cut your losses short if you don't feel like it's going to happen or happen soon enough. Good luck!
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bajeckabean
Posts: 30
Registered: ‎07-24-2008
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Re: **How long does bank take to sign REO contract**

Chiming in late on this one, but I hope it's still helpful.

 

In our case, we offered, had a counter-offer from them, they rejected our counter-offer to theirs, we re-offered a tad higher, and the bank accepted. After that couple of weeks of negotiating, once we settled on all the details it was pretty quick to get things moving. 

 

However, the devil is in the details and with bank-owned properties it seems there are substantially more details and hoops that can complicate the process. For example, even though things went relatively smoothly, it did take longer for the docs to all get signed and returned by the bank. Primarily, this was because the listing agent for the bank was here in the Bay Area. The bank was in Los Angeles. The bank's asset management guy was actually a lawyer based in Texas who had to see and sign off on things first. And the title company was of the bank's chosing and was located in Los Angeles.

 

We didn't know all of that at the time but as we waiting (impatiently) for things to happen we started finding out that everything was being sent one place before being sent to another before being sent to another before being sent to our realtor. And there was a fair amount of paperwork that was NOT signed via fax or scanned email and was actually FedEx'd between the various parties.

 

We were in escrow and the listing was removed from the MLS right away, but we didn't do our inspections or start our contingency periods until AFTER we received the fully executed (signed) contract from the bank. So we waited.

 

Once it was all said and done, we got the house and we've been in for a month. We got what I believe is a great deal (still much lower in price than comp listings nearby and we didn't have to pay any closing costs and even got some cash refunded to us by the title company after). I think we'll be happy here for a long time -- and even though the process was a tad stressful because banks don't seem to abide by the same time-constraints as regular sellers -- we're glad we went with an REO!

 

Good luck! And update this forum with how it all went for you when you've got things figured out.  

Contributor
LindaF
Posts: 12
Registered: ‎06-11-2008
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Re: **How long does bank take to sign REO contract**

We bought an REO in July, it was our first home purchase and it went quick.  We put an offer in on a Saturday, by Monday morning it was accepted.  We closed and had the keys in our hands 30 days later.  Our Redfin agent dealt directly with the asset manager, not the listing agent, so things went quick.  We even got the bank to pay $4000 in closing costs due to minor issues found during the inspection, and they even gave us $1000 extra as a "home improvement" incentive.  The best part is that they had just remodeled the whole house including exterior paint and front lawn sprinklers. 

 

I am a true believer in buying an REO.  We still feel like we stole this house from the bank since no other comparables in the neighborhood have sold for even close to as low as we paid for this house.  The Redfin rebate after was just the icing on the cake!

Contributor
Dealhunter
Posts: 20
Registered: ‎04-16-2008
0

Re: **How long does bank take to sign REO contract**

Here's the update to my transaction. The bank asset mgr returned executed contract about 10 days after I signed. Closed escrow exactly 30 days after initial offer was accepted, which was two days later than contracted because asset mgr took another 10 days or so to approve and return closing documents to title company.  Thanks to everyone who has contributed to this thread. Good luck with your house hunting!