Well, in a nut shell-you were "out-bid".  Bank owned listings are now just like going to an auction.  When you sit down with your Realtor to write that offer,  imagine being in a stuffy ball room, with crazy guys running up and down the isles pointing and screaming to everyone , EXCEPT YOU.

  

 The competion has gotten so intense, your BANK PRE-APPROVAL is no longer your guarantee to getting your offer accepted.  EVERYBODY has ONE    I recently wrote four offers for three clients (two over the asking price)  and NONE of them were accepted.   Why?    We were rejected in favor of CASH OFFERS.

 Even the CASH OFFERS I wrote were rejected.  Some investors  think because their offer is CASH with a quick close, it will trump the other offers.  What you need to understand is that BANKS typically can't close in 5-10 days, so it makes no difference to them.   There's a reason BANKS price these properties " UNDER MARKET".  They do it to create this frenzy, generate multiple offers, and have the listing agents utter those now infamous words: " WE HAVE RECEIVED MULTIPLE OFFERS AND THE BANK WOULD LIKE YOU TO SUBMIT YOUR HIGHEST AND BEST, OR BEST AND FINAL OFFER".   Translation:  We are now at an auction and the highest bidder will be ushered back into that pretty room with the coffee,doughnuts  and potted plants, away from the madness.  As the winner of the auction, you will be treated with respect, as you are told there are NO CONTINGENCIES to your offer, and of course you have purchased AS-IS,WHERE-IS. 

 

There are occasions where Banks are still paying part of the buyer's closing costs, and doing some repairs (or crediting the buyer the cost of repairs).  Banks, in all fairness are doing what any seller would do:  Trying to get the best possible price for their investment. 

 

If you don't want to play Auction, don't get emotionally attached to the property.  If it's priced $20,000 below the comparables, and in reasonably good condition,  be prepared to pay $20,000 over the asking price.  Pick out 4 or 5 properties that you will be equally  happy with.  That way, if you've made your best offer,  and still are not successful, you can move on to the next with no bad feelings.  Listen to the advise of your Realtor, they want to sell the property as much as you want to buy it. Right now, it's a jungle out there.  So get the bullets in your rife and go hunting!  Remember, the one that comes closest to the target wins!