Home Buying in Chicago>Question Details

Mrs. Thomas, Home Buyer in Chicago, IL

Are homes going through the forecloure process availabe for short sale? My bank and agent says NO.

Asked by Mrs. Thomas, Chicago, IL Tue Nov 8, 2011

We live in a condo. In July the landlord stopped taking our calls when we tried to pay rent, this went on for months. Found out why. The bank (Chase) is foreclosing on the property and the first court date for this was JULY. We were looking to buy the property short sale but now my agent and bank are saying that we can no longer buy because of the "status" of the property. Should we wait until the process is over then purchase the property?

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It depends if the foreclosure has been executed or not. If it is in the foreclosure process you might have a small chance to buy it as a short sale, but then again to buy it as a short sale you need that your landlord list the condo as a short sale, then present a good offer at fair market value and if you are lucky and you get a good negotiator they might stop the foreclosure process.

On the other hand if the foreclosure sale happens and no one buy it in the court. The property becomes an REO (Real Estate Owned by Banks) then the bank will assign this Asset to a Real Estate Agent and you might have the Right Of First Refusal Clause that will allow you to buy it.
1 vote Thank Flag Link Tue Nov 8, 2011
if the bank says no and the agent you chose says no why would you insist on making them say yes.. I suggest you step back and cooperate and ask the bank and the agent how they would like to sell the home..nobody is going to work with someone trying to manipulate things
Web Reference: http://www.joeschiller.net
0 votes Thank Flag Link Mon Dec 12, 2011
yes, they are as long as the bank in question is willing. the bank your referring to may simply be unwilling.
0 votes Thank Flag Link Mon Dec 12, 2011
It all depends where they are at in the process. Short sales are before the foreclosure while the owner is still holding the title.
0 votes Thank Flag Link Thu Nov 10, 2011
Some incorrect information below. It was said in an answer that "Short sale basiclly means buying something "as is" without any info on the "meat" of the deal, like does the peoperty have other leans or loans taken out on it etc. "

This is not correct. When buying a property short sale, you absolutely need to be able to receive clear title. Full title searches for liens and other encumbrances absolutely need to be done and are done. Often in a short sale, the house is sold "as is" as far as the physical condition of the home but even that is negotiable. A short sale is much like a standard sale EXCEPT a key point is that the bank (and any other lenders) have to approve the sale because they are not going to be paid the full amount they are owed (hence, they will be shorted). Getting this agreement can often take time (assuming they will give it) and the efforts of an agent experienced in taking short sales through to completion. So when you purchase a short sale, you absolutely WILL do full inspections, absolutely will have title searches done and get proper title insurance, everything you would do in a standard sale. You would never buy ANY property without being fully aware of all the liens against it.
Web Reference: http://JenniferMu.com
0 votes Thank Flag Link Wed Nov 9, 2011
That isn't correct. Many houses that are available as Short Sales are currently in some part of the foreclosure process. These things can happen independently. A short sale must be initiated by the owner though. Currently your landlord is the owner and unless they are trying to do a short sale, the house may not be for sale (short or otherwise) and the bank can not sell the house until they own it (foreclose). So just because the home may be in the foreclosure track that doesn't mean it is available for short sale. You had said the owner isn't taking your calls. You might try to contact them and ask them if they are interested in selling but unless they do, your next option would be to buy the house when it goes REO. Thankfully though, your rights and your lease remain valid through the foreclosure process. One other thing to keep in mind. Short sales can only be conducted when it is an arm's length transaction between buyer and seller. What this means in practical terms is that the bank needs to be sure that you are not colluding with the sellers to defraud the bank and get a special deal.
Web Reference: http://JenniferMu.com
0 votes Thank Flag Link Wed Nov 9, 2011
I'm not sure why your bank and agent are saying "no" based on it being in the foreclosure process; that makes no sense to me. The short sale can happen up until the time of the sheriff's sale. Your bank wouldn't know, and your agent is either wrong or oversimplifying the situation when discussing it with you.

HOWEVER (I'm surprised nobody else brought this up yet), in most short sale documentation you must affirm that you have no prior or current business arrangement with the seller. With your status as a tenant, you can't agree to this without lying, and this could catch up with you later through civil litigation if the seller's lender ever finds out.

Could you wait for the foreclosure sale? Like Joe Schiller said below, you'd probably be wasting your time to wait that long. It could take 2 years, and then the bank still might wait even longer to decide to sell it. And the bank will want to list the property for sale, and they like having the property vacant to do that. So you would be forced to move out and then you might be able to buy the property and move back in. Or you can just purchase a property already on the market now and wash your hands of the situation.
0 votes Thank Flag Link Tue Nov 8, 2011
Waiting on a forclousre property is the last thing you want to do. Keep in mind that you might not be the only person thats looking to buy the property. Short sale basiclly means buying something "as is" without any info on the "meat" of the deal, like does the peoperty have other leans or loans taken out on it etc. this info is not disclosed and have to be verbally asked depends on who your working with. Im not a broker but I know a few good people that can help you in cases like these. Georgekarmi@hotmail,com. Shoot me an email if you have anymore questons. Its silly but if you write down all the questions you have and taking them to your attorney will help you out, sometimes people forget things.
0 votes Thank Flag Link Tue Nov 8, 2011
First of all, BG (commented earlier) your attitude is a big reason why people don't respect their obligation to honor lease and mortgage agreements. There is no free rent, and the lack of payment just means someone is not getting the money they should for the use of the space.

That being said, Mrs. Thomas, you should be looking elsewhere for a purchase. In Cook county the foreclosure process is long and unpredictable and it will be virtually impossible to buy this building prior to the completion of the foreclosure.
It is a great time to buy, find a good agent, have a pro review your financial position and see if being a buyer is right for you.
Good luck!
0 votes Thank Flag Link Tue Nov 8, 2011
If your bank and agent say NO, then you should probably listen to them and find out why, and what they mean by "status". A short sale occurs before or during the "foreclosure process". After the "foreclosure process" it becomes a bank-owned property. If you're not able to buy that particular condo, you can ask your agent look for another condo for you to buy.
Web Reference: http://tampahouse1.com
0 votes Thank Flag Link Tue Nov 8, 2011
your sort of wasting your time but if you have 12 months you might get it..most likely your getting evicted but if you can have a sit down with the land lord I can make the short sale happen.. you need to come to my office with the land lord and I will make the best things happen
Web Reference: http://www.joeschiller.net
0 votes Thank Flag Link Tue Nov 8, 2011
There may be other liens on the property or court order. And only if the bank decides to sell or able to sell it. Otherwise you may have to move out.

Sincerely,

Tuan Do
Real People Realty
847-456-5437
0 votes Thank Flag Link Tue Nov 8, 2011
At this point, it seems you may have to wait until it comes on the market as a foreclosure. This could be a while away.
Web Reference: http://AmericorpRe.com
0 votes Thank Flag Link Tue Nov 8, 2011
Are you living there for free ?? I would hope and "pray" that condition to exist as long as possible :) - you are providing house-sitting for free rent as how I see it.

Your Bank and agents are correct. You can later attempt to purchase at Trustee (not recommended) or as REO when it becomes available.
0 votes Thank Flag Link Tue Nov 8, 2011
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