Can the bank raise the offering price? (short sale, foreclosure)

[moonreflection]

There's a house that I want to buy. The flyer states that it's a short sale and it has been approved by the bank. The flyer even states that they are willing to pay for closing cost. So, I went to look at the house and decided that I want to get it. I decided to pay the full asking price plus I'll even pay the closing cost. They told me that they have another offer. After 2 weeks no answer. After 2 more weeks, I got a reply. They said that the other offer back out and now the house was apprised $20,000 higher what they were asking for. Now they want the price at $20,000 higher than what they were listed. I didn't know that they can do that. Shouldn't they already know what the appraised price is? Wouldn't that kind of like false advertising? Do I need to rasing the buying price if I want to get it.

Any advise will be appreciated.

[tfox]

Until you have a signed contract, the price is still up in the air and can definitely be raised. This happens all the time in strong sellers markets -- buyers bid each other up well past the asking price, or sellers decide that they can make more money and raise the asking price. It's not so common in a buyer's market, but there's no law against it.

[moonreflection]

So, you mean if they were to accept my asking price and I found out it's worth less. I am still bind into some kind of contract but not the other way around? I know I had to sign something with the realtor when making the bid.

[tfox]

The contract isn't binding until BOTH parties sign it. But yes, once you send in a signed contract, they have a specified period to sign and then it becomes active.

However, if you found the house didn't appraise, it would be easy to get out of the contract. There's a specific clause for getting out of the contract if appraisals don't come through. However, under Colorado law it's very easy for a buyer to walk away from a signed contract provided you're still in the inspection period. You just have to make up a plausible inspection issue as your reason for getting out and you're out.

It's actually much harder for a seller to get out of a signed contract, but in this case, that doesn't really apply since it appears that your seller never actually signed your original contract.

[moonreflection]

Thanks for the info. I almost feel like they are just putting a price low enough so they can get people interested in it. Checking to see how much the bid will go to. Then putting it back on the market at higher price after getting the exposure without much sacrifice. The reason I waited this long is because of the good deal I thought it was, not with the $20,000 extra. I could have spend those time looking for something else in the mean time. But I couldn't bid at 2 different place because what happens when both of them accepted the contract. I kinda feel like being trick in a way. Oh well.

[tigerwings]

I just got caught in that. I offered 20k less than asking, the bank came back at 20k more than the buyer accepted for, but since it's a short sale, the back dictates the acceptance. It's still 45k less than is owed

My guessamate is it needs 15k worth of work. I going to walk thru again before I decide what to do.

There is only 2 others houses in the area with the same options. I would still be 25 k those.

[moonreflection]

The difference is you were offering 20k less. I offered the asking price. The aprraised price is 20k higher. So, basically if I am accepting the new asking price, it'll just be the appraised price. The short sale doesn't benefit me because they might be oweing more than the appraised price. I would not gain any equity with this. There's also a chance of depreciation.

[2bindenver]

Often - once the lender is notified that there is an offer, the lender gets busy. They order a Broker Price Opinion, from a local broker and often pull the appraisal - sometime they order 2 BPO's and an appraisal...These lenders are drowning in loans gone bad...there are tens of thousands of preforeclosure properties...anyway - shouldn't they due some due diligence before they write off the debt and 1099 the owner?

In certain places around the metro area REO's are going above asking with multiple offers...bottom line - do what is in your best interest. If the price isn't right and you are willing to risk not ever owning it...wait 30 days and make another offer.

I have been waiting since April 25th for approval on a short sale for an investment property I want to buy. I may hear this week. and I may not. The appraisal was submitted on June 11th - the BPO was in the same day...so why the huge delay? Who really knows.

[High Altitude]

If you don't think the house is worth any more, walk. Always be willing to walk away.

Keep an eye on it.

[tigerwings]

Originally Posted by moonreflection

The difference is you were offering 20k less. I offered the asking price. The aprraised price is 20k higher. So, basically if I am accepting the new asking price, it'll just be the appraised price. The short sale doesn't benefit me because they might be oweing more than the appraised price. I would not gain any equity with this. There's also a chance of depreciation.

To clarify, The asking price from the seller was 250k, I offered 230K, the appraiser came back at 270k. 40K over my offer. I question the appraisal, consideration the work needed to move in. I can voice my displeasure my rejected the deal.

I think 250k may be a fair price.

I know I offered way under market price. The house sat for 7 months. If the bank accepts the orignal asking price, I may buy, but I will not pay the full price. I've also been told it must close by the end of the month because thats when the redemption period ends. I mad my offer 2 1/2 months ago.

I don't think my mortgage company can get it done, their not sure either.

I decide my next move tomorrow.