Mom Of 3, Both Buyer and Seller in Southeast, Springfield...

Help! We have a contract on a property that is in foreclosure! Read for more and please help!

Asked by Mom Of 3, Southeast, Springfield, MO Sun Jul 20, 2008

We have had a contract on a property for over 30 days now, and we just learned that the property has been in foreclosure status and is going to be sold on the courthouse lawn in two weeks! The realtor swears she did not know, and the owners say "we have talked to our bank and they said its ok, not a problem", but no one has faxed copies of our contract, bank approval, etc...appropriate documents that would prove they really do have a contract and a closing date! Please advise...our house we are selling is closing in 22 days and we will be on the street if we don't have a place to move to!

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Forget the agent! Sorry "Real Estate Pros", but agents/brokers are just sales negotiators with limited law experience! This is past the agent's/broker's expertise. Retain a real estate attorney tomorrow to protect your rights and get the answers you need. An attorney normally charges $350-$650, but you will get true information, not a lot of "I think this or that". It is good advice to look for a short term rental or negotiate with your buyer for more time. I am not a big fan of attorneys and rarely use them unless I am not getting all the answers I need. I have purchased a lot of properties, manage and hold them for long term, because I don't believe in get rich quick schemes. I did put a contract on a house once and I too did not know it was a short sale. Everyone, including both agents and the bank that held the existing mortgage said everything was fine. A week before closing I was informed that the sale would not go through. Fortunately, I had time to to call my banker and cancel the appraisal of the Property at the last minute. I did not get charged by my banker and I got the deposit back from the real esate broker about two weeks later. Hope it all works out for you, but get that attorney ASAP so you don't lose any earnest money you may have put down. I know it cost a little, but waiting could end up costing more.
1 vote Thank Flag Link Sun Jul 20, 2008
good afternoon...first of all.......why not see if your listing agent on the home you are selling can revise the p.a. to grant you another 30 days of occupancy after closing rather than immediate occupancy or more if you can get it.......there would be an escrow amount held from your proceeds at closing by the title co based upon how many days of occupancy are agreed to....the amt. per day is based upon 1/30th of the buyer's new mortgage payment....that would help. but you some time....your lender would not have a problem with the doesn't really effect you with the exception of "who is the seller?".......there is no redemption in pa...the sale is absolute......which means that the home would deed right back to the lender after sheriff's suggestion is to have your sales agent (the realtor who is representing you as the buyer's agent) contact the attorney's office who foreclosed on the home....fax the offer to them, and they have to then forward it to the lender that foreclosed........once the property deeds to the lender.and title is clear.they can sell it....(there could be a pmi co. involved that would delay the process).i hope things work out for regards..bob mcclure- mortgage now- farmington, michigan..(248) 974-4444....
0 votes Thank Flag Link Sun Jul 27, 2008
Mom of 3,

Not to put too fine a point on this, BUT I doubt that your agent is a dual agent. Your agent is the seller's agent--UNLESS you signed a Buyer's Agency Agreement with him/her BEFORE you made the offer on the house. Merely writing the contract for you/with you for the house DOES NOT make an agent a "dual" agent or a "buyer's agent." The presence of a signed Buyer's Agency Agreement makes an agent a dual agent when a client buys a house listed with the agent (or in some offices, with the agent's office).

This is not a minor point when you (and/or your attorney) threaten legal consequences. A buyer's agent and/or dual agent has significantly different responsibilities than one functioning as any of the other agency types (transaction, seller's agent, dual agent, designated agent).

In this transaction, you passed on the opportunity to have a personal representative when you had the seller's agent write the contract in the absence of a signed Buyer's Agency Agreement. You do NOT have a dual agent or a buyer's agent.
0 votes Thank Flag Link Fri Jul 25, 2008
Thank you to all who answered....for the record, the foreclosure was indeed cancelled and our bank has proof of that in writing. so WHEW! that was close, and thank God its over. BUT, I did seek legal counsel just to get advice, and the advice I got was get that dual agent working in our best interest PRONTO or there will be legal consequences. I am just thankful and grateful that it all worked out. But we sure did do a lot of sweating and very little sleeping for 4 days until we had the proof we needed.
0 votes Thank Flag Link Fri Jul 25, 2008

I'm sorry to hear about your bad experience in the past. Thanks for calling my answer "smart." You are right that REALTORS are not lawyers. I would never discourage anyone from seeking legal counsel.

I do want to clarify one thing: money down and earnest money are not the same thing. Your downpayment is made at closing, whereas earnest money is deposited into an escrow account when the property goes under contract. Escrow accounts are strictly regulated. If the seller defaults on this sale, her earnest money is not in jeopardy, though the timeframe in which she will get her earnest money back may be in question. A buyer's earnest money is in jeopardy when the BUYER defaults on the sale, either by changing his/her mind or by failure to obtain financing in the appropriate timeframe.
0 votes Thank Flag Link Mon Jul 21, 2008
My My.. all see is "get an agent","get an agent". Your dual agent is fine, because getting another agent within the same office is worthless, and I doubt the contract you signed with the dual agent is going to let you sign a new broker or agent from another office so they can split the commission! But, Liz's answer is smart... contact the agent's broker and get them involved right away. Get that attorney yet? Don't be foolish, preserve your rights. If you put money down, it is in jeopardy. Did you know that if you pull out of this deal too prematurely you could lose your deposit? That's right! The real estate agent cannot give you any money back unless both parties agree, and the seller may not agree - I have seen it happen. Here is what I did once, we moved from the house we sold 24 hours after closing (by the way I would never move out of my house until after the buyer actually closed - but that has to be in your contract up front - too many house closings are delayed or fall through at the last minute). We put all our furniture in storage and moved in with my wife's parents, it worked out for two months and then we found our next "deam" home. Look, the one thing I learned in all my years is that there is always another house out there. Actually, I would wait a little longer to buy because prices are still moving in a downward direction probably throughout 2009 - this could turn out to be a blessing. Maybe store half your belongings and get a short term rental until this house closes or you find something else. Don't freak out you will be fine - get your attorney working on this and start checking rentals or nearby family for your move.
0 votes Thank Flag Link Mon Jul 21, 2008
Right now, TODAY, call the broker for the agent with whom you wrote the contract and ask the broker to get involved--and to involve whoever in the office has the most experience with foreclosure and/or short sales. This is important! Get that broker involved right away.

If you don't have any luck with the broker, you might have to look for another agent, as suggested previously. If you look for a new REALTOR, find one who has experience with foreclosure properties. It would be even better to find one who is experienced with short sales.

"Hurry up and look for another house" is not the only answer and should not even be the first answer. Hving a back-up choice, though, is not a bad plan.
0 votes Thank Flag Link Mon Jul 21, 2008
I would advise doing an addendum to the contract replacing the sellers agent with your agent. (If they refuse....everybody loses....walk away.) Have your agent contact the lenders directly, explain the situation, and fax copies of contracts. The auction can be delayed. Let's hope it's not a short sale. Good luck!
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0 votes Thank Flag Link Sun Jul 20, 2008
The Hagley G…, Real Estate Pro in Pleasanton, CA
YES we do have an agent...we were dumb and let the seller's agent write up our contract (because our agent was never available to go look at the property when we were) and we had no idea was a "dual agent' meant, and did not realize until it was too late that she was the selling agent and our buyer's agent. Our listing agent for our house is just HORRIFIED that we are going to get the shaft big time! She is advising to pull out of the contract fast, and start looking for another house right away since we are so short on time. But this house we have the contract on is the house of our dreams! So we don't know what to do! They are supposedly going to get the document from the trustee firm tomorrow that says the foreclosure has been cancelled....
0 votes Thank Flag Link Sun Jul 20, 2008
Oh, my, Mom of 3, sounds like you're in a pickle - and that jar is stuffed full. People everywhere are dealing with this - it is the risk of buying a short sale. But, did you know this was a short sale?

Do you have a ratified contract? If you have a ratified contract with a bank approval on the short sale, then you might be just fine. The bank proceeds through the foreclosure process until they are positive they have it sold through a short sale.

In any case, I recommend you move quickly to find temporary quarters where your family can live, just in case. You might want to talk with the people who are buying your home - can then push back settlement if needed? You need a little breathing room to juggle whatever might be coming your way.

I hope you have an agent (I mean an agent for you, not the listing agent)? I hope so, in today's climate foregoing a buyers agent is a choice only a fool would make. Assuming you have an agent, hopefully he/she knows the ropes about these types of transactions, but if not, have her tap into the other resources at her office. The broker is actually who is representing you, not just the nice person you have been working with. The brokerage surely has a lot of experience - more than one agent could ever have - with dealing in these situations, and they will give you good advice. They'll know the specifics better than anyone here can.

If you don't have an agent (and maybe even if you do) you will need to hire an attorney NOW.
0 votes Thank Flag Link Sun Jul 20, 2008
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