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Seller, Home Seller in Northshore, Houston,...

We are screwed. We made a full list price offer on a house we knew was on the brink of being foreclosed on.

Asked by Seller, Northshore, Houston, TX Fri Feb 15, 2008

The listing agent told us she was very confident the banks involved would approve it...in the meantime we actuall managed to sell our own house. We signed the P&S on a Wednesday and 3 days later we got the news that the banks would not accept our full list price offer. Now we have 3 kids (5, 3, 11m) are due out of our house March 31 and have NO NEW HOUSE to go to. Totally screwed. I don't even know where to begin.

HELP, HELP, HELP. It is too much work to move into a rental...but I don't want to settle for something just to buy. This totally sucks and I think the listing broker really screwed us.

Any thoughts? We live on the North Shore of MA in a small town so there are not a lot of houses available.

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Jonathan Bowen’s answer
First things first, have yourself one drink. I prefer Coors Light. Make sure you take a few minutes to enjoy it. Come back and read the rest of this post after you've finished your drink.

Ok, now that you've had that one drink I'd like to tell you that you aren't totally screwed. You have options. At this point you have about a week to two weeks to find a replacement property. If you can't find that replacement property in time then your next option is to look into a pre-furnished short-term housing situation. Courtyard by Marriott is an option. Many families in your situation use these types of short-term housing when they are relocating from other parts of the country. You will find something suitable to buy in the next few months. Just take a step back and realize that things could be worse. Good luck, Jon
Web Reference: http://www.bowenboston.com
3 votes Thank Flag Link Fri Feb 15, 2008
First take deep breath and relax, The house you wanted will be foreclosed on because no one is or should bid above the listed price. The conservative estimate on the price of housing dropping is at 20% before it levels out with some experts predicting 30%. With that said if you have good credit and enough money for a decent down payment you will be in a great position in 6 months to a year from now. My advice is find a nice rental for your family and wait for the dust to clear. One you will be able to find a better house than the one you lost for less money. Two you don't want to find yourself a year from now owing more than your house is worth. Just relax
1 vote Thank Flag Link Sat Mar 8, 2008
You've gotten some pretty good advice here. Just a couple of additional thoughts.

Though you may not have gotten top dollar for your house, you're in an ideal situation to buy another one. You'll have the cash...the purchase won't be contingent on the sale of your previous property...and if you use short-term accommodations you can be flexible in the move-in date. And that, in turn, will give you a lot of negotiating tools to get a new property at a very good price.

Too late now, of course, but any agent who tells you they know what banks are thinking--on either a preforeclosure/short sale, or REO property--isn't being accurate. No one knows how the banks will react. And, it sounds like, in this case, that you made a full price offer on a short sale property. That's fine, of course, but the bank doesn't look at it as a full price offer. Instead, they look at it as "How much are we going to lose on this property?"

One other possibility--slim, but possible--is picking up the property at the foreclosure auction or as an REO (real estate owned) property. If the bank doesn't sell it pre-foreclosure to someone else, there will be an auction, and if it doesn't sell there, then the bank owns it. And at some point, maybe sooner, maybe later, the bank will list it with an agent. And it's a bit more predictable (but never a certainty) that if the bank now owns it, it'll sell it for what it's asking. And the funny thing is, it's not uncommon at all for banks to reject a short sale at one figure, then after it's an REO property sell it for less, sometimes substantially less, than they could have gotten from a short sale.

But, as you note, don't just settle for something to buy because you feel you have to. Like I said above, you don't have to settle. You're in a terrific position to buy a property. This is agony right now, I know, but there is an upside. Try to take advantage of it.

Good luck.
1 vote Thank Flag Link Fri Feb 15, 2008
Don Tepper, Real Estate Pro in Fairfax, VA
Yes, but I think the bank will try their best to buy it back at auction. Don't overpay. Good luck, Jon
Web Reference: http://www.bowenboston.com
0 votes Thank Flag Link Wed Mar 5, 2008
Well two banks are involved and their total outstanding debt is WAY beyond what the current market will bear for the house. They owe 850K, house might sell at 650K. Do we wait to try to get it at auction?
0 votes Thank Flag Link Wed Mar 5, 2008
I had a very similar situation happen a couple of months ago but my buyer offered less than list price. Find out who the bank is, call their loss mitigation department and tell them that you want to buy it. If it hasn't been foreclosed on, they can still make it happen. If not, then it will go to their REO department and then you have to wait for it to be relisted in a couple of months... sometimes more. I just hope for your sake that the asset management company is not AMC aka Citi Residential, then they don't care about accumilating inventory and they will just let it go to REO instead of selling it to a bonafide buyer.

Also, is there a redemption period in MA?? anyone know?
Web Reference: http://www.sumnerrealty.com
0 votes Thank Flag Link Sat Feb 16, 2008
Naima: We thought of that...but they've taken it away from the realtor so I'm not sure how we actually get to them. Do we call their lawyer, do we go back to the realtor?
0 votes Thank Flag Link Sat Feb 16, 2008
Have you thought about making an offer higher than the list price on that same house? As long as they haven't foreclosed, there is a chance that you can still buy it. Consider it's value, what it's worth to you, the cost to move into temporary housing and decide how much more you want to offer them.

Web Reference: http://www.sumnerrealty.com
0 votes Thank Flag Link Sat Feb 16, 2008
Brecht: I'll try to give you a call tomorrow, could use a clearer head to help me sort noodle this.
0 votes Thank Flag Link Fri Feb 15, 2008
I graduated Triton in 92. Craigslist or call one of the communities like Avalon Bay, I know a lot of the bigger newer places have a lot of vacancy right now, but then you still have the issue of schools and whatnot so... I guess check with brokers and the Ipswich Chronicle. My mom owns Rowley Clay Studio next to the Country Garden Motel across from the Common.
Web Reference: http://www.provestre.com
0 votes Thank Flag Link Fri Feb 15, 2008
Brecht: When did you attend Pine Grove. My DH is a townie, you might know each other. Our listing realtor advised us NOT to make our sale contingent on finding housing...so like I said, I feel screwed. We do have an attorney and he is awesome. I saw 3 houses yesterday, expect to see 3-4 tomorrow and as many open houses as I can possibly get in on Sunday. Frankly we were tryng not to be greedy. We just asked for enough for our house to make the troubled house happen and then it didn't. Now we are short on $$.

OK, so I do get that the market may give up more BUT I'm worried that inventory will shrink because folks don't want to sell in a down market.

Any idea how to find a nice rental with at least 3 bedrooms (preferably 4). Needs to be a really safe area (little kids) and hopefully close to where we live now so tha twe can stay in the same school.
0 votes Thank Flag Link Fri Feb 15, 2008
I'm from Rowley - went to Pine Grove. It's not terrible to rent right since we will probably see the market give up another 5-10% this year before it levels off, but you will have to move twice - and that's a drag. If you're interested in a blitz of a search I have an associate who will make you a priority and get it done. If you want to talk options you can give me a call. Is the sale of your home contingent upon finding suitable housing? Are you using an attorney? Buying or not buying if you want to chat about what the hell to do feel free to give us a call and we'll help as best we can 781-507-9507. Or you can continue posting here and hopefully that's helpful.
Web Reference: http://www.provestre.com
0 votes Thank Flag Link Fri Feb 15, 2008
We live in Rowley...I would not say that we got what we wanted for our house. We got what we needed to get to make the other house work but I think it leave us 50-100K short of a comparable house to the one we were hoping to buy.
0 votes Thank Flag Link Fri Feb 15, 2008
If you got what you wanted for your house you would be making a big mistake trying to get out of the sale.

I am suprised that you feel that there is not a lot to choose from. Salem Five is on the North Shore and I have not heard people saying the inventory is low. Which town are you move to or stay in.
0 votes Thank Flag Link Fri Feb 15, 2008
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