Foreclosure in 92069>Question Details

Teresa, Home Buyer in Florida

If a home is listed as a short sale and a foreclosure at the same time does the foreclosure override the short sale?

Asked by Teresa, Florida Thu Dec 16, 2010

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A foreclosure always trumps a short sale. A lender will not allow a short sale once the foreclosure has occurred unless the lender foreclosed in error. We had a short sale listing in our office where a second, that had been paid off several years ago, foreclosed because the payoff was never recorded. Needless to say the foreclosure was rescinded because you can't foreclose on a paid off note. That being said, I agree with Ginger. Someone "is asleep at the wheel." If a property is listed as a foreclosure by a different Realtor, then the Realtor handling the short sale either doesn't know the foreclosure happened or they haven't removed the listing from the MLS. Believe it or not, there are times when sellers are not aware that the foreclosure has taken place. If both listings show the same listing agent, then it is probably an error in the listing information. Maybe they meant to say "pre-foreclosure." If you are getting the listing information from a source other than your local MLS, it could very likely be an error in the listing details. The best way to find out whether it is a short sale or a foreclosure is to call the listing agent or agents and ask them. It is a listing agents responsibility to make sure the MLS information is correct and I am sure they would appreciate the "heads up." Unfortunately, if the error is on a site other than your official MLS site, it is difficult, and sometimes impossible, to get it corrected
0 votes Thank Flag Link Fri Dec 17, 2010
Often an owner gets into financial problems making their mortgage payments, once there is a problem with making payments the owner can decide to try and do a short sale. The bank will not approve a short sale unless there is a problem already making payments and the bank might not approve the short sale at all even though it is listed for sale. For a short sale to go through the seller, buyer and lender must all agree and without all three there will be no contract to purchase. As this is all happening the lender can decide to foreclose and they make application to the courts to foreclose and a hearing is set and an auction date. The house can still be listed as a short sale where the seller is hoping to get an offer that the bank will accept, but there is no guarantee they will - at any price. Once the auction date arrives and the house is sold at auction, either to someone or back to the bank the short sale is now moot and dead in the water. The new owner, which is often the bank, can now list it for sale as a bank owned or REO property for sale.
0 votes Thank Flag Link Fri Dec 17, 2010
If the house is listed as both, someone doesn't know what they are doing. A short sale can postpone a foreclosure, if the lender agrees. It is possible to be working on a short sale and the property will be still be foreclosed on even though a short sale is in the process. Once the foreclosure happens, the short sale is dead and the home owner will have to vacate. It is critical that you have an experienced Realtor with lots of short sale knowledge to negotiate with the lender so this doesn't happen.
0 votes Thank Flag Link Fri Dec 17, 2010
It doesnt matter what the house is "listed" as. If it hasnt been assigned an auction date than it isnt a "foreclosure". A house is first available to buy as a home needing a short sale, than it is assigned an auction date and is available for sale at the court house auction and if it doesnt sell at the auction it is then listed for sale as a bank owned home! hope this wasnt to confusing for you! If you have any questions, let me know!
0 votes Thank Flag Link Thu Dec 16, 2010
I may have answered you with ur first question.forclosure can be stopped if the short sale has been approved and agent is in constant communication with bank,so they don't forclose on the existing homeowner.
Madeleine
714-322-5428
http://www.mado1.com
0 votes Thank Flag Link Thu Dec 16, 2010
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