10 Steps to Buying a Foreclosure

1. Seller assigns the properties to an asset company who then lists the property with a Realtor, who puts the property on the MLS.
2. On Freddie Mac / Fannie Mae / HUD and some others during the first 14-30 days (varies) only Owner Occupants offer will be considered. On VA and many bank foreclosures Investors and Owner Occupants can bid on the home immediately.
3. When an offer is written it is entered into the system by the listing agent as soon as they are able, but within 24 hours.
4. Once an offer is entered into the system, if any other offers are received then they are entered into the system also
5. Seller may accept the offer that is in the system or they may counter the offer or they may call for highest and best.
6. If Seller accepts the offer in the system then any other offer that comes in will be negotiated as a backup offer, rejected or ignored.
7. If Seller counters the offer then they will give the buyer a certain amount of time to accept the counter or counter the offer.
8. If buyer accepts the counter then any other offer that comes in will be negotiated as a back up offer only, rejected or ignored.
9. In a multiple offer situation all parties are usually informed in writing that they are in a multiple offer situation. They will be given written notice that they can withdraw their offer, leave their offer the same or change their offer in writing. They are given a deadline to do this. – Do agents ever say there is a multiple situation when there is not?
I have never personally known this to happen. It would be a very unwise thing to do. It is illegal and against the code of ethics to do so. No one deal is worth losing your licensed, being fined, and/or getting a horrible reputation.
10. When the deadline arrives all offers are entered into the system and the seller chooses which offer they are going to accept or counter.

At any time, in the state of Alabama, until you have a fully ratified contract (signed by all parties) anything can happen. However, this is the instructions listings agents also have to follow the instructions of their sellers.
The property stays on the market until there is an accepted contract. Buyers can make offers even after there is an accepted offer, however they are only considered as backup offers, rejected or ignored completely.
The sooner a buyer writes an offer the more likely they will be to not get into multiple offers.
What does the listing agent need in order to submit an offer?
A complete contract, with every issue in the contract addressed.

If you are getting a mortgage you need a pre-approval letter from a bank or mortgage company that states what type of loan you are getting and how much you will be financing.
If the offer is cash you will need to provide proof of funds (proof that the buyer has access to the funds to pay for the property).
Proof of earnest money.
If you are purchasing as a LLC or Corporation you will need articles of incorporation, letter of good standing from the state, and proof you have the power to sign for the entity that you are purchasing as.

Can the listing agent submit your offer if you do not provide a pre-approval letter, proof of funds or proof of earnest money?

Yes. However, the listing agent is also required to put in the comment section of the offer “there is no pre-approval letter,” or whatever else is missing. You will not be able to get an offer accepted without the missing documentation and the missing documentation could keep you from winning the bid in a multiple situation.

Is there anything that can actually keep an offer from being submitted into the system?

Yes. There are questions in the system that are in required fields. Answers are required in order for the system to take the bid. Information about the buyer that is required in order to submit the offer into the system.
On a VA contract – Is the buyer a veteran?, If so last date of service and serial number.
On many other systems the listing agent needs to know if the buyer(s) is/are
an owner occupant or investor?
a licensed real estate agent?
an employee or servicer?
a former owner of the property or relative?

Without answers to these questions and questions like these the systems will not take the bid. The offer can be emailed to the listing agent’s asset manager, so that it is legally submitted, but it will not be considered until these questions are answered. In a multiple situation this missing information could keep you from winning the bid.

This Blog by: Julie Martin, CRB, e-PRO, Broker/Realtor, Port City Realty, Mobile, AL;
877-880-8110 toll free / 251-665-4665 my cell / julie@portcityrealty.com

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