Expert: Jessica Bryan - 8/2/2011

Question
Hi Jessica,

My husband and I are first time home buyers and we put an offer on a corporate owned house that is 5,000 above the listed price.  It is not a short sale.  The next day we are told that "offer acceptance contingent on pre approval" with their lender. My first question is what does that actually mean?  Was our offer accepted or is the offer being considered assuming we get the pre approval?  The next day we went and got pre approved with their preferred lender.  It has been 5 days and no response from seller. I've read that corporate owned homes tend to take their time or have a lot more paperwork to process.  How long should I expect to wait for a response?  I would really like to know from them if our offer was in fact accepted or if we will be competing with other buyers.  Anyhow, any advice from you would be greatly appreciated!

Answer
Hi Stephanie;
What the response meant was that you should first be pre-approved for a loan before the corporate owner will consider or accept your offer.  You are not under contract and because of this they are free to accept another offer.  I would like to ask if your offer included a clause that the home must appraise at the higher price? Across the country today homes are being sold at below asking price.  Consequently I am curious why you offered above asking price. Are you sure that there is value in that? Do the comps in the neighborhood support the higher offer?

Are you being represented by an agent?  If so, have the agent check on the status of the offer or amend the offer to say that it will be withdrawn in 24 hours if there is no reply.  The other option is simply to withdraw the offer.  Until there is a signature on paper there is no contract.  However, corporate owned homes often are slow in their response but tend to do more verbally.  If you want an answer call their contact person and ask what is happening.

Best wishes,
Jessica Bryan