As an Exclusive Buyer's Agent here in the Chicago market, I can tell you that multiple offers for REO properties with it's subsequent, Highest, Best and Final offers is becoming very common. I would like to use this forum to express my utter frustration and anger towards the system currently in place to handle these multiple offer scenarios.To make it simple; WHY DOES THIS NEED TO BE A 'CLOSED BID' process???? To make it easier and more fair in my personal and professional opinion I advocate an OPEN BID platform whereby the end buyer/investor can see the other bids and adjust their HBF accordingly. The closed bid has a great flaw in that the buyer/investor who really wants the property is 'shooting in the dark' without knowing what the 'other guy' is thinking. I appreciate that Banks and Asset Managers believe this will yield the 'highest' offer but I think they can arrive at that number by opening it up.The downside to this as I speak with my clients presented with these multiple offers is they get discouraged and frustrated with the 'buying a foreclosure' process and we as Real Estate and Banking professionals LOSE credibility and trust due to the perception that we are GREEDY and playing games. Why not have a transparent OPEN BID (ie. Auction) scenario which will most probably arrive at the dollar amount the seller wants and give the buyer their 'best shot' so at least they see where they need to be versus 'winging it'.Oh how it would SUCK if my client today loses a HBF offer on a beautiful SFR because they were off by $1,000 on their offer!!!!!
We've recently had discussions within my brokerage about just this. There are no rules (as far as in my State of Georgia & NAR) against sharing what the highest offer price is. In fact, it could be an ethics violation by not giving the price on the highest offer as you are not doing the best you can to bring the best and highest price for your selling client!
Until this year I had never seen competing offers in the 6 years of doing real estate. Since March I have had 6 properties in competing offers for a total of over 30 offers and I have no idea how many counter offers!
Just because it's an REO property we still have a duty to get our clients the best possible deal. It's kinda hard to do with "closed bids". Check with your broker as rules can vary! ;-)
I agree with recommending the Cash Offer over a finance contingency. This can all be spelled out to the buyer/bidder. Once again let us address the real issue which is the 'Closed Door' bidding which is not necessary for the purchase of REO's.
This relates to the HUD process where bids are submitted. In this case we are in an 'Offer' process which gives the seller more latitude in choosing the best offer out there. Anytime a cash offer comes in and is close to a loan offer, I recommend the cash offer.Better chance of getting to close quick.
Henry,
I totally agree. We have to tell the buyers to give us their highest and best offer at the same time telling them the other offers are confidential and can't be disclosed. Having an open bidding would alleviate the frustration of the buyers and would certainly make the listing agent more credible. Now, how can we make this happen?
Kristin
Comments
Until this year I had never seen competing offers in the 6 years of doing real estate. Since March I have had 6 properties in competing offers for a total of over 30 offers and I have no idea how many counter offers!
Just because it's an REO property we still have a duty to get our clients the best possible deal. It's kinda hard to do with "closed bids". Check with your broker as rules can vary! ;-)
I totally agree. We have to tell the buyers to give us their highest and best offer at the same time telling them the other offers are confidential and can't be disclosed. Having an open bidding would alleviate the frustration of the buyers and would certainly make the listing agent more credible. Now, how can we make this happen?
Kristin
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