Kevin Mckay, Home Buyer in Atlanta, GA

I PUT AN OFFER ON A FORECLOSED PROPERTY MORE THAN A WEEK AGO AND WE ARE STILL IN LIMBO BUT WAS TOLD THAT .....

Asked by Kevin Mckay, Atlanta, GA Sun Nov 18, 2007

.... THERE WAS ANOTHER OFFER ON THE TABLE. OF COURSE BY NOW THE OFFER IS CONSIDERED EXPIRED BUT I I`M STILL INTERESTED IN THE PROPERTY. WHEN I CONTACTED MY BROKER (MANY TIMES!) SHE TELLS ME SHE HASN`T HEARD ANYTHING YET. SHE ALSO TOLD ME THAT IT IS NOT UNUSUAL TO TAKE A WHILE WHEN DEALING WITH A FORECLOSURE. DO I NEED TO PUT IN ANOTHER BID WITH A NEW EXPIRATION DATE? DO I NEED A NEW BROKER? I`M GETTING FRUSTRATED. ANY INFO OR ADVISE WOULD BE APPRECIATED. THANKS. Kevin 678-344-0873

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7
Teena Edge’s answer
Lets clarify a little bit here:
Pre-foreclosure...the homeowner is most likely in lis pendens, resulting from being delinquent on payments. Lender has started the foreclosure process through the courts, and more than likely will have existing liens against the property. If sold on the court house steps, these liens will be the new owners responsibility. Do your homework when making this kind of purchase.
Short Sale...(best case scenario) homeowner has been talking with the lender, and the lender has agreed to negotiate an offer of acceptance. Most lenders require the property to be listed on the MLS prior to negotiations, for the best offer to be submitted. When an offer is accepted by the owner, it is then submitted to the lender. The lender will in turn request a BPO (Broker Price Opinion) from a brokerage in the same county as the property, which will show the current market value. This process is really slow, if all required paperwork was not submitted, prior to listing as a short sale. The owner has to prove a hardship with documentation to the lender-and has discussed requirements to accept an offer. Most owners will have a second or third mortgage on the property, and negotiations will also have to be worked out with them as well. If sold on the court house steps, these liens will be the new owners responsibility. Do your homework when making this kind of purchase.

FORECLOSED property: This property has already been through the court preceedings, sold on the court house steps and is now owned by the lender. The lender is responsible for all liens against the property, and most are removed by the time it is listed on MLS. In this scenario, the lender is quick to respond to an offer. If an offer is accepted, each lender has thier own criteria for back-up offers.

Hope this helps and Good Luck to you!
0 votes Thank Flag Link Tue Aug 12, 2008
BEST ANSWER
Good luck. I have seen foreclosures where the bank acted quickly and we sold in a couple of weeks, but that unfortunantly is NOT the norm. I have seen foreclosures and preforeclosures where with a dozen GOOD contracts on the table the bank took about 8 months to make up their mind, then relisted the property with a different realtor and threw out all the contracts that had been submitted and started over. Banks do what they want to do on their timelines and they totally ignore all suspenses written into the contract unless it's in their favor. Unfortunantly, there is NOTHING that your Realtor/Broker can do to speed them up. Expiration dates mean nothing in a foreclosure situation, OTHER than, if it is past the date and they come back and tell you, that your contract is accepted, but you no longer want the house, then you can normallly get out of it. I have firiends who specialize in foreclosures and pre-forclosures and they spend hours doing the banks job, in order to get anything accomplished. Now that said, there are some banks that are very responsible about it and work to get the home sold (mainly the larger banks) but the majority, especially the tiny little companies are a real pain.
Web Reference: http://www.yourstlhome.com
0 votes Thank Flag Link Sun Nov 18, 2007
The banks have set procedures that they "have" to go through, per their internal audit requirements and the requirements of the state that the home is in. It has nothing to do with the bank's resources, though with the number of foreclosures and preforeclosures currently on the market, their departments are much busier than they were a few years ago, it's just going through all their checks and balances. Keep in mind that there may be multiple banks and lending institutions involved as well - for example if they had a first mortgage, then took out a second mortgage to do some home renovations, then they used those lovely little checks that their bank sent them in the mail, not realizing that those were actually a line of credit against their home, etc. There is absolutely nothing that the Realtors can do about it (though I have seen some help the sellers to with all their requirements in order to try)
Web Reference: http://www.yourstlhome.com
0 votes Thank Flag Link Mon Nov 19, 2007
It takes time to through this type of purchases, the only thing your broker can do is ask the other agent what the process is. Be patient, if you really like this propety. In the meantime keep your options open, look for other properties
Web Reference: http://www.erickcatalan.com
0 votes Thank Flag Link Mon Nov 19, 2007
Does anyone know why these sales take so long? Is it lack of resources at the lender? Is there some home the seller will suddenly generate money to save the sale from shorting?
0 votes Thank Flag Link Sun Nov 18, 2007
Kevin -

Your broker is NOT the problem. Banks are famously, notoriously slow about their response.
When the market was HOT HOT HOT in 2004, there were far fewer REOs - Banks average Days on Market (list to close) was 169 daysI almost 6 months!!!!! Now that there is too much inventory they will only take LONGER. Be patient with your Realtor - It is not her fault!

Link for REO List date to close date statistics below:
0 votes Thank Flag Link Sun Nov 18, 2007
Jim Walker, Real Estate Pro in Carmichael, CA
MVP'08
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I do a lot of short sales.....a week is nothing in the process! It took me 5 months to get one approval! I have another one going now that is 3 months in. And yet another where we;'ve been waiting 4 weeks already! Good luck!
Web Reference: http://www.cindihagley.com
0 votes Thank Flag Link Sun Nov 18, 2007
The Hagley G…, Real Estate Pro in Pleasanton, CA
MVP'08
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