Foreclosure in 48328>Question Details

Chris, Home Buyer in Waterford, MI

How long does it take to close on an REO property?

Asked by Chris, Waterford, MI Wed Jul 2, 2008

My bid was accepted on April 2, 2008. I was preapproved and I've had the utilities turned back on and the inspection and appraisals done. I was supposed to close on April 21st, but when the titlework was done a lien showed up. Now I've been in a holding pattern since then. The house has suffered some water damage and storm damage during this time. The house was in great condition when I put in my offer and it was accepted, now what do I do? I really wanted the house because it was a great deal when I put in my offer. Can I renegotiate since it's been taking so long to close and damage has been done since I put in my original bid? What do I need to do to get things rolling so no further damage occurs?

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Answers

7
Chris
If you are financing this property then appraisal value might be an issue. Ask your Realtor to do a market analysis and see if this property is still worth the hassle.

I am puzzled how a lien just "showed up". Who's minding the store here?
0 votes Thank Flag Link Tue Jun 30, 2009
Keith Sorem, Real Estate Pro in Glendale, CA
MVP'08
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The listing agent could obtain estimates for repair and submit a request and explanation to the asset manager to approve this repair to prevent further damage and reduction in value.

You can wait and close when they are ready.

This one is risky - withdraw your offer and ask for your deposit to be released and then submit a new and lower offer. Remember, the house is back on the market and they can take or leave any offer. (This is the only way I know of to renegotiate your offer.)
0 votes Thank Flag Link Tue Jun 30, 2009
Chris, Fred's answer is very good. Most bank addendums do address both of these issues. Please make sure your buyers agent goes over this and explains it to you. A real estate attorney may not be a bad idea either. Good luck!
0 votes Thank Flag Link Wed Jul 2, 2008
Chris,
Your real estate agent should be helping you through this process, maybe they could get help from their broker. There is a clause in most addendums that specifically address your issues. Normally the addendum says the seller does not have to clear the title liens, they can cancel the deal and return your earnest money deposit. Most will try to clear the lien, which brings you to the condition of property clause. Find what the contract/addendums say about this and that will guide you and your agent along the process.
It would be wise to get help from a real estate attorney at this point, too.
Good Luck, and I am sure you will get a positive resolution to this. Welcome to Wateford.
Fred
0 votes Thank Flag Link Wed Jul 2, 2008
Chris -

I had one bank put me on hold, then came back and accepted my offer with closing in the same month. Then, I had another bank, WAMU, not give me any feedback after 2.5 months; lost my client as they found another home.

As to renegotiating your contract… Have your REALTOR® try it. They may work with you... and, it would be ashamed if you would have never tried. Also, in Texas, there is an Addendum we can offer for a credit for repairs from the Seller at closing that may be easier for the lender to work with rather than the lender going through their price renegotiating process.

Good luck,

Chris Rodriguez, REALTOR®
0 votes Thank Flag Link Wed Jul 2, 2008
Hi Chris,
If the property condition has changed since your offer was accepted you may have the ability to renegotiate the price. Read your purchase contract and any addenda that you signed. Your agent should also be able to advise you. Hard for me to comment without seeing the house before and after the damage
0 votes Thank Flag Link Wed Jul 2, 2008
Hello Chris,
I would encourage you to go back and re-read your contract. Often I see clauses in them that speak to what party is responsible for damage to the property during the contract phase. It should be clearly stated in there. If it's not in there, you certainly have the right to prepare and addendum to the original contract, asking for concessions for damages ---especially if the title company that's holding up the deal was chosen by the seller/bank.

In terms of how long it takes to close a REO deal...well issues like yours are very common. Depending on the banks' response period, once you have a fully executed contract, and barring no unforeseen hold-ups, it's typically up to your lender on how quickly you can close the deal.

Hope this helps and Best of Luck. Let me know how it turns out!
0 votes Thank Flag Link Wed Jul 2, 2008
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