Question about banks regarding offers to buy a house

Question

How long does it take for a bank to respond regarding your offer on a house? Just generally.

There are two we like. One we like much better than the other. We have about a month before our lease is up and we have to move. We are afraid to wait for a response to the 1st one only to get rejected and not have enough time to close on the 2nd one, which we are almost sure would be accepted (it's been on the market 266 days). If we submit bids to both at the same time, we could get stuck with the 2nd choice.

The owners are still in the first house, they are not packed up and did not have a sign in their yard. I feel like they may make things difficult because maybe they don't really want to move. The 1st choice is by far the better home though.

We don't know what to do!

Answer 1

What country are you in?

In the US, it's the owner of the house who lists it for sale and responds to any offers, not the bank.  After buyers and sellers have agreed on a price and all other terms, the buyers go to their bank to apply for the mortgage.  Getting approved for a mortgage is a lengthy process that can take anywhere from 2 or 3 weeks to as much as 2 months.  

If you want to make an offer on a house, make the offer.  Stipulate in the offer that you must take possession at closing, and then name a closing date that is reasonable.  You CAN talk to mortgage companies before the sellers sign the contract and can even begin the mortgage process; you just won't have a property address or loan amount yet.  But there's still a lot that can be started, and the mortgage company can give you an idea of whether they need more than 3 or 4 weeks to process your mortgage application.

Your realtor can help you with other options that are available, like moving in ahead of closing and paying rent to the sellers.  Your realtor can also give you some pointers on what to do if you won't be closing for a couple of weeks or more after your lease is up.

EDIT:  If you make an offer on a house that is in foreclosure, yes, the response will come from the bank because the bank owns the house.  They typically respond quickly, because they want to get the house sold.  In most states, there is a section in the contract where you have the option of specifying a deadline for them to respond.  If they don't respond before the deadline, the offer is null and void.

The other couple isn't waiting on the bank.  What they're telling you is that they want you to go to a mortgage company FIRST, get a pre-approval, and get a letter from your lender that says you definitely qualify for a mortgage for up to xx,x*x dollars.  Get back with your realtor.  The sellers can make a counter-offer to your contract that requires you to apply for a mortgage within some particular time frame and also is subject to your being approved for a mortgage by {date}.  

If the sellers do this, remember, this isn't an acceptance of YOUR contract - they will accept your contract only if you agree to the new terms they added, which makes this a counter-offer.

You can also make a counter-offer to their counter-offer that says they can't sell the house to any other buyers without giving you notice that they receive another offer and allowing your mortgage company X number of days to complete the mortgage approval.  

Your agent could be doing a LOT of negotiating with these sellers in the next few weeks.