Foreclosure in 55427>Question Details

Heather Hump…, Home Buyer in Lakeville, MN

Contact the bank directly or not?

Asked by Heather Humphries, Lakeville, MN Mon Jan 11, 2010

I put an offer on a short sale only days after it went on the market in August and its my dream home so I've waited and waited and waited. The redemption period ends in 3 weeks. I recently found the county foreclosure sale information for the home and know the price they bought the mortgage for at auction (about 14K more than the list price which is what I offered). I am pre-approved for a mortgage that more than covers that cost plus 3-5% for closing costs so I could make a lucrative offer to the bank now that I know that information. My question is, should my agent or I contact the bank directly, if so, what should I say? If not is there anything that can be done other than waiting and hoping to be the first to put in an offer when it gets relisted as bank owned?

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Rather than the comment that you should find a good agent (which is kind of dangerous for anyone here as you already have an agent), let's focus on what you are suggesting.

The reality is that the bank does not own the property. Until redemption is over you and your agent should be dealing with the agent of the seller. Unless you have specific permission to contact this third party (lender), you have no "right" to do so.

I understand the frustration but you could be excused of interference. And frankly could cause more harm than good.

What you and your agent could do is offer the selling side to help with the situation. Does the listing agent have training and experience in this area? Maybe so, maybe not. Feel free to offer help. At the mimimum ask the listing agent to update you on progress so far.

Perhaps everything that can be done is being done. Sadly, only about 20-25% of attempted short sales actually go through.

Worst case scenario is that you will be able to make an offer when it becomes bank owned.
0 votes Thank Flag Link Tue Jan 12, 2010
Thank you all for your answers thus far. I do have an agent and he has kept me informed of any information he is privy to all this time. We were given misleading information about the property at the outset so did not research foreclosure information, my agent apologized for that. The frustrating thing for both of us is that the listing agent has not given us any information. He let us know that our offer was accepted and was a strong offer comparatively (which I understand is more than some people find out). Since then he has only responded to e-mails and phone calls with "No news guys, sorry". The bank and original mortgage holder is Bank of New York Mellon which is a huge conglomerate corporate entitiy. I do not wish to stir the pot so we will not call the bank to try to negotiate I just worry that we may miss the window of opportunity when it is relisted after it turns over; we can't live on the MLS waiting for it to disappear and reappear. How long does it usually take once the bank takes possession for it to be relisted?
1 vote Thank Flag Link Tue Jan 12, 2010
Heather, did you make your offer throught an agent? Usually, in such circumstances, the seller of the property is the owner. in your case, I would presume that, since the redemption period is not up, your agent would be in contact with the selling agent and you would be getting updates from these agents, not the bani. In Minnesota there is a fairly long (six months) redemption period and it appears, since you made your purchase offer in August, you must have made it right at the beginning of the period and, indeed, while you indicate that you knew this was a probable short sale, made it in good faith. provided earnest money, etc. Your agent should be keeping you up to date, and providing all the information possible. In the redemption process, if the lender takes possession, it will probably take a bit of time before the property is on the market and offered for sale. Your agent needs to know if your offer can remain, or if you can make another. You may also be told to wait until an agent is named. Remember, your agent works for you and can make all kinds of inquiries on your behalf. I would advise using the resources he or she possesses. You can't become expert in these negotiations over night, and your agent probably has resources that you would not be able to find yourself. Talk to your agent; be prepared to work with the process of that particular lender. It isn't about waiting and hoping, but rather understanding that this has to go through the system designed for that purpose by that lender. Liz.
1 vote Thank Flag Link Mon Jan 11, 2010
As an REO listing agent myself I find it is usually anywhere from 1-2 months after redemption for the property to go on the market. Can be sooner but not so much lately. Banks have not been in a real hurry lately. And the REO department is completely separate from the short sale department so don't expect the right hand to know what the left is doing.

One thing to watch for is when redemption is up is if the property is posted by the new agent. That would give you the opportunity to contact him/her and let your intentions be known. Might get you to the front of the line.

So I would be keeping an eye on the property as well as the MLS.

Best of luck. I know you are trying.

0 votes Thank Flag Link Tue Jan 12, 2010
Heather, my guess is if it is only 3 weeks to redemption, and you are not set up to close, or close to it, you may have to wait until it is bank owned. Banks have different departments for short sales, and bank owned. Have your agent call the bank on your behalf, but they may not talk to him without authorization from the seller.
0 votes Thank Flag Link Tue Jan 12, 2010
Steele, I understand you point about the agent, but what I'm wondering is why Heather has to ask these questions here if she has an agent? Her agent should be able to answer these questions. When an agent submits an offer on behalf of a buyer, they are usually in communication with someone on the seller's side of the transaction prior to doing so. That means they've establishes a rapport with someone who has information about how the short sale process is going. They would also be able to tell the buyer side agent whether or not there are 1,2, 3 or more mortgages being negotiated.

Heather, I suggest you pose these questions to your agent and have them get on the phone to get you some answers. I do agree that calling the lender on the other end is NOT your agent's domain. But, they can get the seller's representatives on the phone or show up in person to sit on the door step unless/until they get some answers. You may not like the answers because the banks will do what they will do and won't be hurried or rushed by anyone.

And, Heather, just be aware that only about 25-30% of all short sales ever go through. Good luck!
0 votes Thank Flag Link Tue Jan 12, 2010
It is quite possible that there is a 2nd mortgage that prevents the bank from accepting your offer without the 2nd mortgage company taking less than they are owed.

Once the redemption period is up the 1st mortgage company will own it clear with only delinquent taxes/assessments due. If the bank is local or smaller, you/your agent may make some headway with them. If it is some conglomerated bank, your best bet is to watch the house and wait for a posting from the future listing agent saying they have secured the property. Once you see that, prepare an offer and submit to that agent. Even though it isn't yet listed for sale, the agent is obligated to share all offers with the seller and it gives you the best chance to be in there first, which may or may not help you get the house.
0 votes Thank Flag Link Mon Jan 11, 2010
Find out who the trustee is you can find that out at (Or your agent can). Yes I would contact them and see if they would entertain your offer.

I spoke to an agent they did offer to sell directly to her client if she processed the deal for a flat fee.

You may have more luckwith a small bank than with a large bank. There is a reason for the saying "Nothing ventured nothing gained." GO FOR IT.

Good Luck - come back and let us know if you got the hosue or NOT.
0 votes Thank Flag Link Mon Jan 11, 2010
Oh Heather,

I would definately agree with Lynn....find a good agent and let them work on this for you.

0 votes Thank Flag Link Mon Jan 11, 2010
Your agent should place an offer banks normally do not work direct with buyer.

Nor are they going to furnish you the documents to submit a sales offer, you agent has all those docu's represent you in best light for bank possibly accept your sales offer

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0 votes Thank Flag Link Mon Jan 11, 2010
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