Los Angeles

[Jay-Z]

Hello all,

It's our first time buying a home and we are really interested in an REO/bank-owned property. The price is right, the location is good, and the condition of the house is excellent.

We were informed they did not accept our offer. We are however, the back-up offer. We are going in at 20% down whereas the other party is going in at 30% down. We are really interested in getting the bank to consider our offer and are even considering going in with a higher down payment (up to 30%).

Could someone shed some light on how we can get the bank to consider our offer? I believe the bank can still do so before entering into escrow. Any help would be greatly appreciated.

[AlexSin]

Let’s say you’d like to sell your car and you have two offers.

First 30% cash and 70% Cashier’s check

Second 20% cash and 80% Cashier’s check

Which one will you choose?

I would take the one with the higher bid.

[movingbackhome]

I'm not really sure if the bank (or anyone) is concerned with the down payment number in itself if the rest of yur qualifications are as good and the sale would go through. Banks are more worried about the money they get (which is the selling price) and how fast they can clear their books. Whatever you do not put down, the seller collects at close of escrow from your lender. If the property is selling for 400K and you put 20% down, at close of escrow, the bank walks away with 400K. If you put 5% down, at close of escrow, the bank walks away with 400K. It does not make a difference.

[Nanomug]

The more cash put down as earnest money can be percieved as a stronger offer. Sometimes 30 percent down is considered a good thing in the event that the appraisal comes back lower than the contract price.  The seller knows the buyer can pay the difference.  Bank-owners are interested in selling and getting a certain amount on the property.  Closing is the goal which is why at times the bank-owner will take a lower all cash offer over a high financed offer.  The fewer things that can go wrong is a plus.

The bank picked the offer they liked best and you want them to change their minds and pick you despite the fact that the property is under contract and the winning offer is working on closing.  You are asking that a contract be broken to benefit you for no other reason than you want the property.  If you succeed then someone else can convince the bank to cancel your contract.  

Let it go. Keep it in your favorites in case something happens.  Remember that price, terms and contingencies are the parts of an offer that the seller looks at.  With REOs the asset manager decides what the important items are in an accepted offer.