Home Buying in El Cerrito>Question Details

Eric, Home Buyer in El Cerrito, CA

Should we proceed with foreclosure purchase on property that currently has lis pendens filed by the seller (bank) against prior owner?

Asked by Eric, El Cerrito, CA Fri Aug 31, 2012

We're in contract for purchase of a foreclosure property. Recently found out from title company that home has an outstanding lis pendens notice. Seller (bank) filed suit in June against the previous owner whom they foreclosed on in March. The previous owner proceeded to sell the property in May. No idea if the sale was completed or legal. Thus, the bank filed suit against the prior owner and the prospective buyers (4 in total). Bank offered indemnification for the us the buyer in addendum language "Seller will be handling and is responsible for any and all issues pertaining to the lis pendens. Buyer will not be held responsible in any manner for the lis pendens before and/or after COE." What does this mean for us? Are we protected completely? We like the house. Offered $32K over asking (overpaid). $1.3k paid already for inspection/appraisal. Needs roof replaced, some termite/dry rot, sewer lateral. Inspec contingency passed 8/30. Have loan contingency to 9/6. Stay or walk away?

Help the community by answering this question:

Answers

5
Sounds like it is too early. The owners still have a chance to pay up and make their project work for them. It will be able to be sold next, but not until it is cleared the bank selling process.
0 votes Thank Flag Link Tue Sep 25, 2012
Goodness, sounds more to handle or worry about....

This is such an acrimonious situation....what's to stop the seller from trashing the place in retaliation. I have seen way too many properties that the sellers have destroyed in similar situations.

If it were me, I'd probably hang it up and look for something that doesn't have the this type of problem. Bad enough you're buying a foreclosure which is typically as is where repairs and replacements are probably lacking.
0 votes Thank Flag Link Fri Aug 31, 2012
that is a true dilemma. ask your realtor to recommend an attorney to discuss your specific situation. It will be worth the money. Reading "overpaid $32K" makes me think you are not in love with the house as much as you should be but really you need to talk to an attorney. Realtors can't give legal or tax advices. You are talking about a potential headache for months.
0 votes Thank Flag Link Fri Aug 31, 2012
Hi Catherine,

Thanks for your input. I suppose everyone goes through buyer's remorse a little bit once they begin finding out all the additional costs that go into first time home ownership. We really like the house, but aren't in love with it. All the homes we were in love with have been bid up beyond our means. It's been a really intense market lately for buying homes in El Cerrito where we're often coming in second or third to people with all cash and the ability to overpay. It's been feeling like foreclosures have been our only chance at getting a house. We might need to find the services of a local real estate attorney for advice? Any recommendations?
Flag Fri Aug 31, 2012
Eric,

Unless you have a better egg to sit on in the meantime, I would stay and see how it plays out. If staying were to cost you additional money or lost opportunity elsewhere then you have a tough decision. You have a bona-fide contract, which in this extremely tight inventory is hard to get.
0 votes Thank Flag Link Fri Aug 31, 2012
You should have had the Preliminary Title quickly;
Why did you spend $1300 so fast?
Why didn't the Bank disclose the Lis Pendens when you Offered? They Had to know!!

Do you still WANT the house?
0 votes Thank Flag Link Fri Aug 31, 2012
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2015 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer