With so many foreclosed properties, why don't banks want to sell them easily!?

Question

Why aren't banks really eager to sell all those foreclosed properties they have? I mean, they aren't MAKING money by keeping them. We're trying to buy this bank owned home, but the bank is giving us such a hard time.

Getting a mortgage isn't a problem for me, I already have a commitment letter for way more than this house. My townhouse is closing end of July, but they still think it's a contingency and wont' even look at my offer!!!

Jreal - Yes, I do have a pre-approval already

Answer 1

I think foreclosed in America means Repossed in UK.
It all boils down to the fact that whilst the home is not sold, the people who previously owned are still paying the mortgage or amassing debts cos they cant pay. It doesnt cost the bank a penny more to delay the sale and get a better price, and that is what they are doing with you.

Answer 2

A lot of times lenders dont want to waist time with pre-qualified letter from a buyer, wich I believe is what you have because you said it was a "commitment letter".

Anybody can give you a pre-qualification letter, what is important here to solidify your offer, you should have presented a pre-approval letter.

Lender definitely do not want to keep properties on their books, they are not in the business of managing properties therefore they do lose money when they have not sold a property but on the same token they will not accept clean offers if the lender thinks they are not getting a fair price for it. Eg: If the property is valued at $500K but they are selling it for $450K and you offer them $350K, they will most likely reject your offer.

Good luck

Answer 3

Banks are not interested in anything other than a clean solid offer. Your pre-approval letter is basically worthless to them, since no information on that letter is verified. I could get a ham and cheese sandwich preapproved in less than ten minutes.

Banks are pleased to sell these lender owned properties, but they don't want to waste valuable time with offers which are not shown to be solid. Get a REAL mortgage approval letter, verified by income level and credit checks. You will be surprised how they will then entertain your offer.

Answer 4

I don't know this for sure, but I would imagine that the banks are being a little more careful with their lending practices because of the large number of foreclosures lately. For several years it seemed like anyone and everyone could qualify for a home mortgage and now the number of foreclosures is just mind boggling.