Home Buying in Crystal Lake>Question Details

Mrplow847, Home Buyer in Lake In The Hills, IL

can a short sale house go into foreclosure if there is an "offer on the table" and the homeowner accepted and the bank is reviwing it?

Asked by Mrplow847, Lake In The Hills, IL Mon Mar 22, 2010

i have an offer in on a short sale house for 3 months the home owner accepted and the bank has the offer and i just found out the house went into foreclosure a week ago and the listing agent never told my agent

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Answers

14
Yes, it happens a lot. The new HAFA Short Sale guidelines that were just implemented have addressed this and other negatives in Short Sales.
0 votes Thank Flag Link Tue Feb 26, 2013
Mrplow847,
A short sale home is usually contingent upon the seller's lenders approval of any contract. Even if they accpet your offer the foreclosure process does not stop and it may be foreclosed on. Consult with your agent and your attorney for more information if needed.

All the best,
Gary Geer

Reslults Realty USA
0 votes Thank Flag Link Mon Feb 25, 2013
The bank can foreclose on a property even if an offer has been accepted by the seller. Since foreclosure is a process, it's important to know what step the bank at in the process. A skilled short sale team of Listing Agent & Attorney will be aware of the steps that are being taken and stay in communication with the bank. The bank may delay foreclosure if they are aware of the offer.
Every situation is different, but usually worth the effort.
Mary Hamrick - Broker, Short Sale & Foreclosure Resource
847 471-6102
0 votes Thank Flag Link Fri Feb 1, 2013
Short answer is yes. Technically, the lender can file for a foreclosure anytime after that payment is past 90 days due. There is something in every single note on homes in Illinois called the acceleration clause. It just simply says that if you go 90 days or more behind the lender can call the note due.

The fact that you are negotiating or going through a short sale does not make the lender obligated to hold off.

Sean Cochran
http://www.qmlending.com
630-330-2229
0 votes Thank Flag Link Thu Jan 31, 2013
One thing we can all agree on...short sales are frustrating. And most of us will also share a distaste for banks, especially BIG ones. One of the biggest problems is lack of communications. The BIG banks have a million employees divided into 500,000 departments, with each employee responsible for their TINY LITTLE piece of the puzzle. And rarely do they communicate well across departmental lines. So, the person in the Short Sale Department that the Listing Agent is talking to, MIGHT NOT be talking to the person in the Foreclosure Department. Common Sense (did I just use that term in association with a bank??) would suggest that it is in the bank's best interest to dispose of the property in short sale (less time, less cost and likely higher end sale price), but it is very difficult for two people in different cubicles, maybe in different states that don't talk to each other to exercise common sense. And besides, they get paid the same at the end of the day whether the bank does the smarter thing or the dumber one, so not a lot of incentive, other than a good work ethic (which I'm sure most of them have, just not the ones I get to speak with). Do I sound cynical? Yes. And you can believe I've had enough frustration with short sales to warrant it. You CAN get a GREAT DEAL through short sales (I did, see http://www.trulia.com/blog/jim_olive/2012/05/short_sales_in_…), but you should NEVER, EVER count on it! Best of luck with your home purchase...Jim
0 votes Thank Flag Link Thu Jan 31, 2013
This is not uncommon. Sometimes the bank will set the sale date just to put some pressure on the seller, and the buyer to close escrow without delay. Key is to follow the date closely and keep calling the bank to make sure they postpone it as necessary. Banks will usually postpone the sale date as long as they know you are working diligently toward closing. But they will usually do so a few days before the sale date.
0 votes Thank Flag Link Thu Jan 31, 2013
Anything can, does and will happen in a short sale.
Unfortunately, in every instance of disappointment I can recall, the buyer responds in a manner similar to yours. They want to blame the only face they ever see, the real estate professional.
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It does not matter that you READ and SIGNED the Short Sale Disclosure that clearly stated that a miracle must occur for you to actaully purchase this home. The document clearly stated THIS SALE MAY NEVER BE SUCCESSFUL! Your signature, attested to your belief in miracles.
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Short sales are the most complex, convoluted, illogical, disorganized, frustrating process in real estate. There exists an illusion of rules but any can and does happen. And it is mostly beyond the reach of your real estate professional to influence what happens behind the curtains of the servicing company, insurance company, investor, home owner and other lien holders..
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DrMOM2223 question will bring to the surface the incredible dysfunction of the process. This home may not reappear as a bank owned sale for YEARS! It can sit vacant and deteriorate. OR, it could pop up in four months. It could be sold silently to a bulk investor or assigned to a REO company for refurbishment and resale. There is just no way to know what is happening behind those $900 Billion dollar curtains.
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The truth is, sometimes miracles don't happen.
Please don't blame the real estate professionals.

Best of success to you,
Annette Lawrence, Broker/Associate
Remax Realtec Group
Palm Harbor, FL
727.420.4041
http://RealEstateMadeEZ.us
0 votes Thank Flag Link Thu Jan 31, 2013
This just recently happened to me. The bank accepted my offer but said I had to close within three weeks because it was going to go into foreclosure. My lender said it probably cannot happen. A week later, I came back and offered the same deal as cash. Two weeks and the closing deadline later, they denied my cash offer.

My question is, how long after it starts the foreclosure process does the house go back on the market?
Thanks!
0 votes Thank Flag Link Thu Jan 31, 2013
It can happen and it is frustrating for both the seller and the buyer of that property. A top agent with a lot of experience in short sales can facilitate the process and usually work with the bank before that happens.
Web Reference: http://www.talkwithtina.com
0 votes Thank Flag Link Fri Jun 25, 2010
Hi Mrplow847,

Unfortunately, this type of incident occurs all the time. Whoever is in charge of submittin and negotiating your contract needs to stay in direct contact with the bank so this does not happen. It does not matter if the home owner accepted the offer. The bank needs to accept the offer before foreclosure proceedings occur.

Good luck in your search!

Cherrie Catama
Newman Realty
cherrie@newmanrealtyillinois.com
0 votes Thank Flag Link Tue Mar 23, 2010
You are dealing with 2 different branches of the same stream. Neither may know what is going on with the other side. It can, will, and does happen. It should not, but this is life not perfection, especially when dealing with banks.
0 votes Thank Flag Link Mon Mar 22, 2010
Unfortunately I've seen this happen so I know it can. On the bright side, when it came back on the market as a foreclosure it was alot cheaper.
0 votes Thank Flag Link Mon Mar 22, 2010
Yes, it sure can...........
0 votes Thank Flag Link Mon Mar 22, 2010
The listing agent and listing agent's attorney need to contact the bank - both the loss mitigation department and foreclosure department and make sure everyone is on the same page. This sometimes happens because the information does not filter down to everyone involved. I have seen this happen before but it is possible that the foreclosure process can be delayed if the communication is there. Hopefully a negotiator has been assigned etc... Good Luck.
Greg/REMAX
Web Reference: http://www.gregworks4u.com
0 votes Thank Flag Link Mon Mar 22, 2010
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