Days 0-7: No offers considered. 8-12: Offers considered on property ONLY from NSP buyers, municipalities, non-profit organizations & owner occupant. 13+: All offers considered from all buyers.
–Excerpt, foreclosure on MLS
With the caveat that I don’t specialize in foreclosures, this is the 4th time in as many weeks that I’ve seen a variation of the language shown above (“NSP” refers to “Neighborhood Stabilization Program”).
What’s going on?
Typically used in conjunction with a deeply discounted price, the bank’s strategy appears to be two-fold: 1) accumulate multiple offers; and 2) segment prospective offers by “more” and “less” preferred categories.
“First Come, First . . . Wait”
If so, it’s going against the grain of how real estate is normally sold — namely, “first come, first served.”
Put it this way: a significant percentage of the time in real estate, the first Buyer is the best buyer.
In this case, however, the bank-owner is explicitly telling that Buyer — at least if they show up in the first week — that they need to cool their heels while other prospective Buyers (possibly) join the fun.
I can imagine at least a few such Buyers responding, “No, thanks.”
At the very least, it’s hard to imagine any sane Buyer submitting an offer before Day 7, when they risk having it shopped to other Buyers.
From the bank’s perspective, the ultimate test of such a strategy is whether it actually increases what the property sells for.
I suppose if more foreclosures start popping up with this language . . . the banks think the answer is “yes.”
P.S.: Is is kosher (legal) for the banks to define which Buyers they’ll consider offers from — and when?
As long as they’re not discriminating against protected classes (race, religion, etc.), I would assume that they can.