Offer accepted on REO, Bank took an additional offer, lost out.

[Dan Taylor]

Hello everyone, 

Friday afternoon I was informed my full price offer was the winning offer on a REO. I was told Friday evening we would have a contract to sign on Tuesday (today) due to the MLK holiday and earnest money to wire by the end of the day.

Instead of getting directions from my agent. The agent informed me that the asset manager of the bank took an additional offer, $1000 over mine and the deal was off. I was told there was nothing I can do and that this is perfectly legal because we did not have a signed contract. 

Is this so or has a law been broken? Is this something I should be prepare for as a frequent, infrequent or rare part of the process? Is there some kind of solution where I can get my verbally accepted offer "locked in" for future properties?

I will be looking for a different agent because this one has been very reactionary and does not seem to be the foreclosure specialist that they have been made out to be. Suggestions of vetting agents would also be appreciated. I am in Reno / Northern Nevada and much more action oriented than the typical agent seems to be. 

Thank you for your input!

[Elise Hazzard]

Hi Dan, 

I've experienced this same scenario several times; and although I cannot explain concretely what occurred, I'll offer the following potential rationale.

IF the bank has had a favorite buyer who is known to complete, and he has an 'understanding' with bank on verbal offer that includes escalation clause, the bank can always say they had a reason to take the favorite buyer's offer.

 The bank took you verbal and got another 1K from someone they have experience with, then gave them the written contract.

Disappointing but a lesson for the future.  Happy to hear you are leaving that agent; have you ever considered becoming an agent?

Good luck,

EFH