I made an offer on a home that was accepted, the home is scheduled to be auctioned in June. Not a short sale, seller has equity. Any caveats ? Thx!

Asked by Alex, San Francisco, CA Sat May 14, 2011

I plan to close in May. Are there any added risks to the buyer in this type of transaction?

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Oggi Kashi’s answer
Oggi Kashi, Agent, San Francisco, CA
Sat May 14, 2011
Yes, Shel-lee - you are right. If the seller has enough equity to cover the closing costs, transfer taxes, late fees, penalties, attorney's fees and sales commission, and it's all paid in time, then there should be no problem.
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Shel-lee Dav…, Agent, Rolling Hills Estates, CA
Sat May 14, 2011

I respectfully disagree with Oggi's response to you. Just because the loan is in default, as long as there is equity the lender will be paid in full and therefore does not have to agree to the sale.

Now to your question. You might want to seek legal advice, if you will be closing close to the auction date. I am not an attorney and cannot tell you if there are any legal pitfalls. From experience, this is what I know.
1. Make sure you close well before the auction date.
2. Make sure funds, including all penalties and legal fees incurred by the bank, are forwarded to the bank at closing and at least 5 days before the auction date.
3. Make sure you have title insurance issued on the date of closing. This should protect you in case the bank incorrectly proceeds with the foreclosure. The title company will take of your legal defense to get the property reinstated.

Hope you truly enjoy your new house. Dare to Dream.

Shel-lee Davis, QSC®
Certified Distressed Property Expert – CDPE®
Short Sale & Foreclosure Resource – SFR®
Certified HAFA Specialist – CHS®
SSG Pro®
Your Real Estate Consultant for Life
RE/MAX Palos Verdes Realty
424-2HELP12 (424-243-5712)
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Oggi Kashi, Agent, San Francisco, CA
Sat May 14, 2011

Is it a lender auction? If so, the seller must be in default and the bank will have to approve the sale. How did this happen? what does your agent say? Have you check the recent title records of the property? Has the seller brought the loan current?

Oggi Kashi
Paragon Real Estate Group
CA DRE 01844627
Web Reference:  http://www.oggikashi.com/
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