Question about making offers and contracts....?

Question

I have an offer in on a house. I just noticed the status has changed to Pending. This house was a foreclosure so the bank has really drug out the time here. In fact we were going to pull our offer if we hadn't heard anything by 6 PM tonight. It's been 2 weeks!

What my question is... When an offer is made and the seller accepts it, does the status automatically go to pending. Or would the buyer have to sign more paperwork to actually put it under contract, or is the accepted offer the contract? It was a multiple bid situation, and at this point I'm so frustrated with how the situation has gone that I don't want the house. Surely they would've contacted the winning bidder before the status changed to pending right?

I'm sure my agent will call me soon, but I'm just trying to decipher this on my own!

Answer 1

Foreclosures are more difficult in the contract process than conventional purchases. When you make an offer it becomes a contract when accepted. In the foreclosure situation, the bank reviews multiple offers at the same time.
You should have been notified immediatel if your offer had been accepted. How much earnest money was required? You should contact your agent right away.

Just FYI, here is how the bank looks at offers. They will analyze each to determine the highest net return. That means if one person put in an offer with an agent and another without, the higher net would be the person that put in the offer without the agent (no commission). Similarly, if two identical offers came in and one could close in 30 days but another required 90 days, the 30 day offer would be a higher net (60 days less interest on the outstanding balance). All contingencies affect the net return, so the fewer contingencies the more likely your offer will be accepted.

Answer 2

I don't know what state you are in, but I can tell you how it works in Texas. There are three types of "foreclosure" houses that you can place offers or bids on (offers and bids are not the same thing).

FHA loans gone bad - Becomes a HUD house. These are listed by a Realtor in the MLS (for information purposes) but bidding is done online - You must use a licensed rel estate agent who is registered with HUD. You "bid" on these, and the bidding period is 10 days when the house first hits the market. On day 11, by about noon the winning bidder will be posted and the agent will be notified.

VA loans gone bad - Becomes a VA foreclosure. Also listed in the MLS. Paperwork is downloaded from a website by your licensed real estate agent and your offer is submitted to the listing agent. There is a ten day initial offer submission period.

Conventional loans gone bad - Becomes a "bank foreclosure" or "lender owned" or "REO" property. There are probably other names for it too, but these are the ones that the lending institution actually owns, not the government. Different banks handle this differently. Some have bidding, some use the offer system, some wait a set period before responding and some respond immediately. The manner that they're using should be disclosed in the listing.

Bidding system - Put in your best "bid". Other people do the same. Nobody knows what anyone else is doing. The seller picks the best bid (if the minimum amount is met). The answer is yes or no. There is generally no counter offer - on a bid that was just a bit low, they might call your agent back to see if you'd go a bit higher. (seldom happens like that)

Offer system - Write up your offer. Seller may immediately respond to it with a counter offer, or wait the initial period and respond to all offers at once with "suggestions" to make your offer better.

At any rate, for your situation prior to the listing being changed to "pending" the listing agent would have probably notified the buyers agent. (at least an hour or so). You made the statement ".. at this point I'm so frustrated with how the situation has gone that I don't want the house." If you really don't want the house, have your agent tell the listing agent that you are withdrawing your offer. "Acceptance" is when the seller's side (agent or seller) notify the buyer's side (agent or buyer) that the offer has been accepted. If the buyer's side notifies the seller's side that the offer is withdrawn prior to being notified of acceptance, then the offer is withdrawn - even if the listing agent got the seller to sign all the paperwork already. Don't do this unless you really don't want the house any more.

Good luck with your home purchase!

Answer 3

Hello, how are you doing? I am both a Realtor and a Loan Officer so I know quite a bit about Real Estate. Usually there would be an offer submitted with an Earnest Money Deposit. At times, an offer can be made on a P&S signed by the buyer. Once the seller signs, it becomes a legally binding contract. If it went into pending and your Realtor didn't tell you that they accepted your offer and you have not signed a P&S, chances are that your offer did not get accepted. I hope I was of help to you.

Derik Tutt
www.DerikTutt.net.tc
Loan Officer

Answer 4

When the final contract is signed by the buyer and then by the owner, and their lawyer has it, normally that is when the house goes to contract or pending status and is taken off the market normally. During the offer process the house remains on the market. Even when the offer is accepted it remains on the market until the final contract is signed by both parties. Normally this is about 1 week to 3 weeks after the offer is accpeted.

Answer 5

There,s an offer and an acceptance. Once an offer has been accepted it ceases to exist. The signing of a contract is the culmination of ownership transfer, if the contract states so. If it was a tendering process, then the winning bid will be announced later.Hence pending the announcement of the winning bidder.However, may be bidswere to be submitted by a particular time. So I hope you read the contract well before signing it if you have signed it.

But please inquire first of what is happening.