Reject Accepted Offers

Buyer Beware...

It's hard enough to win the bid on a bank owned vacant home.

Many of the houses are priced for sale, are well below the current market value.

If the vacant house has any appealing features, multiple offers from several buyers are submitted.

When there is more than one offer, the seller will give everyone bidding on the bank owned home an opportunity to submit their highest and best offer.

I've seen houses sell for $10,000 to $50,000 dollars over the initial listing price.

In 2011; I submitted 6 offers, in my target area, that were within my target purchase price.

4 were either rejected because of the first time home owner exclusion, or I was out bid.

2 of my offers were accepted.

Much to my surprise from previous years of buying houses, my excepted offer more than likely, lead to a closing.

Why Would I Reject My Offer That Was Accepted By The Bank?

Usually, a home seller that lived in the home they're selling, would require a disclosure form that explains the deficiencies, if any, the home owner experienced while living in the home.

A disclosure of the house's condition is not required by a seller who has not lived in the home.

Bank Owned Homes Do Not Come With Disclosures!

Therefore...

Buyer Be Ware

Cities, Townships, and Villages are now requiring a vacant home to have an inspection
by their Building, Electrical, Mechanical, and Plumbing Inspectors.

In my opinion; the seller, even if a Bank is the Seller,
should have the house inspected at the time of the listing,
so buyers like you and me can make an educated decision
to buy the home with confidence.

There Are Time Limits on City Inspections

In my area, City inspections are good for six months.

I can see the advantage for a Bank owned house for sale not to do inspections for buyers to evaluate.

Many times, a property will be purchased without the inspections.
That can be a risky mistake.

About My Rejecting Accepted Offers

It took about 3 to 4 weeks for my offer to get accepted.
Waiting for my offer to get accepted did cause a bit of anxiety at first, because there is no communication with the seller.

In previous years, it was possible to be present with the seller when my offer was submitted.

Or...

I would get a reply in 1 or 2 days.

Other than a walk through and I know I can remodel anything in a home,
we cannot do a thorough inspection because all the utilities are shut off.
Also, the Realtor® is simply showing the home at this time and not allowing several hours for a complete inspection.

On the 2 accepted offers I rejected,
there were problems beyond typical remodeling improvements...

1) On the first house, after my offer was accepted, I ordered the City Inspections, and the City's Building Inspector condemned the house as unsafe.

2) The second house, after my offer was accepted, I found out from the Building Department that the house was in a flood plain which
is not uncommon, but there was a bigger problem...

The second house was on a slab. The lot was the original water catch basin for that neighborhood. Yet, the City allowed a house to be built on that lot.

Even though the Building Department told me the house was in a flood plain, they didn't tell me the house flooded with water twice in the past.

Luckily, I talked with the neighbor...

He told me the house filled up with 3 feet of water.

The house looked good.

The inside of the house was in good shape.

The foreclosed price was $147,000 and I won the bid at $30,000.

It looked like an unbelievable great deal.

Needless to say, I backed out of the deal.

Backing out of accepted offers because the facts aren't before me when making offers is getting to be embarrassing!

I remember, in 1979 when I bought my 2nd home, the Broker knew everything about the house.
She was selling houses in that area for decades.
She explained to me what a good deal it was, and what to expect for repairs.

Broker and Real Estate Agent Duties Have Changed

In this market, vacant homes are listed for sale in droves.

Many vacant houses are sold in a few weeks to investors because the prices are so low.

It's more of an Auction Style real estate market.

In the past, market indicators would either say, "it's a buyer or seller's market." When was the last time you heard that?

In my opinion, from my last 2 accepted offers, it's a, "Buyer Beware Market".

What seems to be a good deal because of a low price,
could end up being a devastating financial disaster.

Although it may be embarrassing to reject an accepted offer,
I can't rehab a house that is condemned, or live in a house that floods.


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