Foreclosure in Rowlett>Question Details

Michelle, Real Estate Pro in Rowlett, TX

If a contract exsists on a house that has been in 'quick sale' status, then goes to Foreclosure...what?

Asked by Michelle, Rowlett, TX Mon Apr 7, 2008

happens to the Contract that was given on the property? Thnks

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9
Michelle, banks operate on their own schedule and to achieve their own goals. Those may not line up with what you want. A short sale actually refers to the fact that the selling price is expected to be short of the mortgage amount. The banks are anything but quick about agreeing to take a shortage.
If the loss mitigation department accepts your offer, then they have to notify the foreclosure department to stop proceedings. We have actually been caught in a situation where the shortage was zero, so the foreclosure department did NOT stop.
You can attend the foreclosure auction with cashier's check in hand to buy it from the bank's trustee on the first Tuesday each month. The bank will bid the amount owed on the loan. If you bid higher, it's yours, but you have to pay right then and there at the courthouse. Usually, it is better to let the bank take it, and then they will offer it again later through a Realtor. You will have time then to do inspections and get a mortgage loan of your own, which you won't if you buy at the courthouse steps.
The bottom line is that the bank decides (sometimes strangely) and they can supersede a pending contract for sale by foreclosing the property. If your earnest money is being held at a title company, you will get a refund fairly easily.
Web Reference: http://www.SumnerRealty.com
1 vote Thank Flag Link Fri Oct 24, 2008
Hello Michelle. It sounds like the bank may have not yet approved the short sale. It is very possible that the bank will still approve the short sale, but the banks do not hold back on starting the foreclosure process just because they have a short sale offer on the table. It is not uncommon for a lender to record a notice of default or file a lis pendens (the first step in a foreclosure) while they are considering a short sale offer. If they think that they'll approve the short sale, they can always postpone the foreclosure auction. I would say, as long as the foreclosure has not been completed, there is still the possibility that the short sale be approved. One more thing, while you are waiting for the lender approval, you don't really have an enforceable contract. The fact that the seller signed your offer does not constitute a legally binding contract as the the seller's acceptance is contingent upon receiving the bank's approval. Since you don't have a fully executed contract, your accepted offer will just expire upon completion of the foreclosure (by operation of law so-to-speak). I hope all of this makes sense to you. Good luck.
1 vote Thank Flag Link Mon Apr 7, 2008
Ute Ferdig -…, Real Estate Pro in Newcastle, CA
MVP'08
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Michelle, I like Bruce, do not understant Quick Sale. Were you aware that the seller was trying to sell before the bank forclosed? How did they explain quick sale to you?

Not all sellers qualify for a Short Sale, this is not something the banks have to give, it is something the banks have guidelines for.

If this seller does qualify and the sellers agent did not take the proper steps to begin the short sale all may not be lost. The sellers Broker or your agent may be able to assist. First they need to find out if the seller qualifies, if so and the discussion with the bank begins, the forclosure process can be stopped if you are in Title.

I am afraid that this seller did not qualify or why else try a quick sale, unless the selling agent did not know how to handle a Short Sale.

We have a Short Sale Addendum that states you can't change your mind but the Lender can. So if you had an agreement from lender they can still change their mine. They seldom do but can.

I hope you can still get your house, It may be a matter of a couple of thousand more in interest and the seller may want to pay that to save his/her credit.

Good Luck

Margaret
0 votes Thank Flag Link Mon May 26, 2008
What is "quick sale" status? Interesting question for your attorney or title company. I am not an attorney, but I think you should contact the trustee, tell them what you have and work with them. Let it go through foreclosure and do the deal directly with the bank. Technically I'm guessing you could sue the seller, but if they have no money and no house what good is that? Hopefully all you have lost is option money to the seller. Title company should release earnest money back to you with your demand.
Web Reference: http://www.teamlynn.com
0 votes Thank Flag Link Tue Apr 8, 2008
Bruce Lynn, Real Estate Pro in Coppell, TX
MVP'08
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Truly need more details however If I understand your question, if there is a contract on short sale it does not go to foreclosure UNLESS the short sale buyer can't purchase the home then the bank could foreclose on the property.

I hope you have a seasoned agent that assisting you in the process there are many tips and tricks for foreclosures, pre-foreclosures, short sales in order to secure the winning bid for the buyer. I have been a listing agent and buyers agent on short sales
Web Reference: http://www.lynn911.com
0 votes Thank Flag Link Mon Apr 7, 2008
Wait. Wait. and after that, you will wait some more! Unfortunately Michelle it sounds like you are eager for this offer to be accepted, that's just not realistic. How often do you call your REALTOR for an update on the property? I deal with short sales and I always tell my clients that I will call them in 3-4 day intervals. That is usually as good as it gets as the lines of communication with the banks are so long that waiting is a part of the deal. If you are short on patience, then you may want to go for something else. The tax sales at the court steps are a good start, but the whole 6 month redemption period on tax sales sometimes come back to bite you! Good luck with this one!
0 votes Thank Flag Link Mon Apr 7, 2008
Unfortunately Michelle,

You will have to be dealing directly w/ the listing agent if still in the short-sale listed period. Banks do take a LONG time to get back to you on short sale offers (that's why I think they should be called "LONG SALES")

The only other way to work it out if it is going to foreclosure is meet up at the county steps on auction day and try to pick it up there..(however.. you will need a cashier's check handy.. not sure if you were up for paying cash or not)

The last resort is to always wait it out and keep a deadly watch on that property, so that as soon as the bank lists the house as an REO; your Realtor is already submitting an offer immediately!

Hoep that helps
Web Reference: http://www.eXposedHomes.com
0 votes Thank Flag Link Mon Apr 7, 2008
My realtor is in contact with the listing realtor and she is in contact with the bank in Calif. and also, she's horrible about returning phone calls. Do they have to give me the bank information so I can contact them directly?
0 votes Thank Flag Link Mon Apr 7, 2008
Michelle, the contract would automatically be void. The owner who negotiated the contract is no longer the owner of the property and thus doesn't have the ability to sell it. Have you contacted the bank to let them know that you had a contract on the property? They might honor it with careful consideration.
Good luck!
Web Reference: http://www.christesch.com
0 votes Thank Flag Link Mon Apr 7, 2008
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