Home Buying in 02762>Question Details

Jacksonjan, Home Buyer in 02762

I (the buyer) was supposed to close on a short sale in 2 weeks.

Asked by Jacksonjan, 02762 Fri Apr 1, 2011

The offer was approved by 2 banks. I had an inspection done that showed mold and my broker said they got an estimate for cleaning for $1300 and that the sellers boyfriend knew "someone" who could take care of it for $700. Reluctantly I agreed with the knowledge that I would have someone else inspect it after. I was just informed that the neither the bank nor the listing agent have heard from the seller and they have until April 6th or the bank is going to foreclose. I'm going to continue to look at properties, but any info about Massachusetts Short-Sales would be a great help. Thanks

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Sounds like the seller may be letting it go to foreclosure rather than pay the $700 for the mold clean-up or other demands the bank has made on them. Remember the seller doesn't get any proceeds from the sale and their credit gets dinged either way.

You should discuss your concerns with your agent and protect your earnest money if this does not close. You could also try to buy the property after it forecloses perhaps for less money than your current offer.

Good luck,

Sandy
1 vote Thank Flag Link Fri Apr 1, 2011
You have a contract and that states what your options are. Your agent should be assisting you through this.

This is what sort of happens in a short sale;
You write an offer
The seller accepts that offer contingent upon the bank approval
The bank approves (or counters) the offer
The Seller and Buyer accept the new Terms
The contract proceeds as per written.
Your agreement is between you and the Seller. If you are exercising an option in your contract you need to have it in writing and agreed to by the seller. This would change the terms of what the bank has agreed to and the process can start over again, unless you and the seller work out the details without changing the terms of the bank. But the Bank still has final approval and the Bank will see on the HUD statement any changes.
The bank can foreclose anytime provided that the due process and notification has been followed, regardless of the short sale approval.

Good luck to you.
Web Reference: http://terrivellios.com
1 vote Thank Flag Link Fri Apr 1, 2011
Unfortunately the bank can foreclose even during short sale proceeding even though most banks hold off the foreclosure when a short sale is offered. It could be that the bank has had this property in delinquency status for so long or that the seller has gone back an forth with the bank and now the bank is cutting the cord. Remember a short sale is a negotiation with a bank to accept less for a debt which was leveraged by a property. Thus a bank can choose to speed things up or slow them down depending on a sellers intentions or their own interests. The whole issue with a short sale is not the house but the mortgage and if the seller abandon a property the house is taken as collateral. Unless you or the bank can get in-touch with the seller it looks like you may have lost this property. The Sellers still own the property and thus must settle on the sale for you to own it. You can't go around that and make a deal alone with the bank with out their authorization even with their acceptance and or if you remedy the mold yourself. In your case I would do everything I can to get in-touch with the sellers or your not going to settlement. Please know that I am an agent in Virginia and don't know what specific laws you have in Mass. so I would recommend you ask your agent what to do and if they don't know ask them to find an agent who does. Also I would recommend not putting an offer on another property as you still have a contract in place and the sellers could pop up at the last moment. Ask your agent how you could get out of the contract if even possible with Mass. law. I'm sorry I couldn't be of more assistance. Good Luck.
1 vote Thank Flag Link Fri Apr 1, 2011
I am the trustee of a small complex of condos. We just had someone go thru a shortsale. No matter what-always have your own people inspect the condo-even if it is brand new. Always see and read the condo docs carefully before buying. Many realtors don't tell you that it is a good idea to see them in case there is anything you can't live with. Speak with neighbors and find out if maintenance is done regularly and if pros do it. Find out how much money they have in the reserve account. If they don't have one I would steer clear. Find out the condo fee and perhaps get a copy of the annual meeting minutes-that will tell you what issues are recent. You can also get copies of bank statements which will tell you a lot about what they spend money on. If the don't have minutes or an agenda from the annual meeting I would also steer clear because management doesn't know what they are doing.

We had mold in one of our units just before a short sale. Our guy did it and found there was very little mold after all and it was a lot less expensive that originally thought. I think the mold inspector was also a mitigator and wanted to make some money. The association had to repair it right away and were responsible for it because it was in an exterior wall and not do to any actions of the owners. I wouldn't be worried about the mold as long as you have your own people do the work. $1300 shouldn't be a big deal for the Association to come up with if they have a reserve fund. But they may not be responsible for the problem. Good Luck!
0 votes Thank Flag Link Sat Feb 9, 2013
Home values in the north east are not as bad as in some parts of the country. The bank prefers a forclosure in some cases.
0 votes Thank Flag Link Fri Apr 1, 2011
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