So I'm putting in an offer today on a home that just went on the market 4 days ago in an area with a ton of REOs (this is a home for myself). The agent for Wells Fargo has stated that there is another offer on the home already as well. I'm offering full price, but the seller pays closing costs (including the FHA funding fee of 1.5%).

I know that banks work methodically when dealing with offers on REOs. What is more important to the bank? Bottom line payment for the house (offer - closing costs), down payment, whether or not the buyer uses the bank's lending branch, etc.?

I'm trying to put together the best possible offer here but it's hard because I've never done an offer like this. Any help is appreciated.

The bank compares what it would "net" from each offer. If there are multiple offers, the bank may contact each potential buyer and ask each to submit their "highest and best" offer. The bank could also counter each offer differently. The bank could also just accept an individual offer that it thinks has the highest chance of closing and not respond to any other offers.

Every bank is different all you can do is submit the offer and see what happens.

Certain lenders price agrressively to move there assetts. Wells Fargo is one of them. good luck

All you can tell your buyer is to submit the offer that if they didn't get it they could walk away with no reservations and move on to the next.It's not worth quiveling over a few thousand if it meets there needs.

If this is for an investment numbers is all that matters and emotions don't play into it.

I think this IS the Buyer. He's been carefully researching FHA 3% DP loans here for a couple months now.

LOL, good eye Vermont! I am the buyer/agent here. My offer is in at the asking price. I couldn't afford much more than that, so my reasoning is if they don't accept the offer then it wasn't meant to be.

I'm told we may get an answer by the end of the day. But noon Saturday there were 3 other offers so I'm not holding my breath.

Teke, don't hold your breath on getting an answer by the end of day. I work for a wall street bank, and as you may know, most loans and collaterals end up on wall street. Typically banks make their decisions on offers in 2 to 3 months. REO's take a long time to process.

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www.ForeclosureLook.com

and to answer your original question, 100% banks only care about the bottom line in case of REO properties. Only thing that matters is how much money the bank will recover from the failed loan and how fast they will recoup the losses, meaning they'll take the offer that's paying all cash for a quick close

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www.ForeclosureLook.com

Wells is pretty quick to respond in my experience & quite reasonable.

Thanks for the info. I still haven't heard anything, so I figure I won't for the rest of the night. This is my first home, and I never realized the amount of butterflies you get waiting for an answer on your offer. I can't imagine what it must of felt like when it was a feeding frenzy back in 2005.

If you offered their asking price, chances are you will get it. Most of the other offers are going to be way below their asking price form investors who bid low on REO's all the time in hopes of picking them up well under market value. Good luck!!!

Well they just did the whole "Last and final offer" request a few minutes ago. I'm keeping my offer steady. Do agents ever try to use this as a bluff to get more money out of buyers? Their reasoning is that they have multiple offers that are similar, but of course I have no idea how similar they are.

You should have went up 100 to maybe 1,000 dollars.

What happens with investors is they never pay over asking. If it's still a good deal others might have offered asking as well and by upping it a few hundred you might beat everyone out.

Definitely you do not want to get into a bidding war and go way over asking! Too many other properties out there for that.

Thanks for the advice. I went up $700, should get a response by tomorrow afternoon, could be today. Since I've been giving a play-by-play up to this point I'll let you know how it goes.

This process has given me the confidence to finally jump into real estate and start working with clients. I'll probably be doing that shortly.

I can only talk about my own listings with Wells but we are in multiple offers on most of them. The bank is listing them priced very competitievely & generating a lot of multiple offer situations.

There is more to it than the price you are offering, the seller is looking at the total net to the bank, so the amount of seller concessions is a factor as well, ie are you asking for closing costs, repairs, etc?

Despite the need for a lot of things that were pilfered from the house (such as doorknobs, cabinet knobs, towel racks, inlaid surround speakers, stove and a destroyed toilet) we're only asking for 11K in closing costs.