Seller’s RIDICULOUS Counter Offer on a Bank Owned Home (REO)

I have a CASH buyer that made a FULL PRICE offer on a bank owned home in Queen Creek with $1000 earnest deposit, no contingencies, (he did not ask for seller assistance with closing costs) and wants to close in 30 days.  You think the bank would jump at the offer and it would be a slam dunk, right?

Apparently…not so much! I received the following counter from the listing agent via e-mail today. My comments are in BOLD next to each condition:

The Seller countered your Buyer’s offer, as follows:

•  Property is being sold as is and no repairs or concessions will be offered (do not send a BINSR, the seller will not sign) I will send a BINSR, it is up to the seller if they sign it
• Close of escrow to be 10/1/2010, note that we can close early if all parties are ready  Not a big deal,  4 days after the date originally listed on our offer
•  Buyer to pay a $50 per diem in the event escrow does not close 10/1/2010, at no fault of seller Should not be an issue. My buyer is paying cash so there will be no waiting for lender approval or an appraisal
• Title and escrow to be Seller’s choice. Escrow agent and branch will be assigned after the contract is fully executed. Already outlined in the original purchase contract we submitted
• Earnest money to be $7,790 payable to the title company and deposited within 24 hours of receipt of fully executed contract. Buyer is not that crazy about this but he is paying cash so it is agreeable
• Buyer waives inspection contingency. ARE YOU KIDDING ME??? ABSOLUTELY NO WAY WOULD I ADVISE A BUYER TO ACCEPT WAIVING THE INSPECTION CONTINGENCY ON A BANK OWNED HOME WITH NO SPDS OR CLUE AND A $7790 EARNEST DEPOSIT AT STAKE
• Buyer to pay for their own closing costs; Seller will pay customary closing costs EXPECTED ON BANK OWNED SO NO BIG DEAL
• All offers are subject to management approval. THAT’S A GIVEN ON BANK OWNED
• Page 8, line 362 of the purchase contract to read 08/31/2010 (time for acceptance). OK
•  Counter offer expires 08/27/2010, at 10:00 AM. BANK WANTS 24 HR RESPONSE, AGAIN NOT A BIG DEAL

If your buyer accepts these counter offer terms, please email me back indicating so. At that point I will accept the counter offer in the seller’s system and the seller will generate their addenda for the buyer to sign.  This process typically takes about 1-2 business days.  During that waiting time frame the buyer does not need to sign anything additional.

So, I did what every good buyers agent should do when they receive a counter offer. I called the buyer and went over the terms and conditions with him. After explaining to him what waiving his inspection contingency meant, he instructed me to contact the listing agent to let them know this was unacceptable. I then called the listing agent to go over the conditions and the buyers response. I explained to her that we both felt (me and the buyer) that it was ludicrous that a bank would ask a buyer to waive the inspection contingency on a REO property, especially with a $7790 at stake, and if this truly was the case it would be a deal breaker for my buyer. She agreed with me and explained why she thought this was being asked for by the seller. She said this was a Bank of America owned home. She stated that very recently, in the past 60-90 days, they have been “farming out some of their inventory” to the Asset Management Division of REDC (the auction company) and these were the terms outlined by them, not BOA. She admitted she has never seen a seller outline this in a counter and was shocked when she saw this as well. I have responded to the seller counter via e-mail with my buyer’s counter. She will present it to seller and get back to me. I can’t wait to hear their response! Stay tuned…I will be sure to do a follow-up post so you can see how this one turns out.