Short Sale Procedure??? Can it go into foreclosure after short sale and what would force it to get to that stage??

Asked by Eirinn, 02191 Wed Mar 10, 2010

I am currently living in one unit of a two family which is in short sale for approx. 6 weeks. There is an IRS lien on the house and for the past year, the rent has been paid directly to the IRS. Since it is quite complicated, I wanted to at least get first dibs on the property and 6 weeks ago when the 'For Sale' sign went up, I put in an offer. Of which, the seller verbally accepted upon tax lien being lifted and taken care of. His realtor has not been very helpful in offering information and I wondered at this time, what is the standard time frame of short sales? Since I live there, I may have more patience than most but need to know if it is just a lost cause. The owner moved in last weekend which complicates it further and seems to add to my suspicion. A real estate attorney advised that no rent should have been paid all year and certainly not now since it is in short sale mode. However, I don't want to get a bill from the IRS since nothing has been paid since Jan. 2010. Thank you!

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5
Scott Godzyk, Agent, Manchester, NH
Wed Mar 10, 2010
Once the seller moves out , the chance of a short sale getting appoved is near nil once that happens. Your best bet is to follow the advice of your attorney. If teh property goes into foreclosure, teh foeclosure auction will take place, chances are teh bank will buy it back as it has an irs lein and they will need to clear it through the foreclosure process. You living there will have some negotiating power once it gets assigned to an agent to sell it. good luck working things out
Web Reference:  http://www.ScottSellsNH.com
1 vote
Kevin Vitali, Agent, Tewksbury, MA
Wed Mar 10, 2010
You should follow the advice of your attorney. Your real estate attorney can also contact the listing agent and maybe be more successful getting information. Just as an FYI a verbal acceptance is legal but not binding. If you want the property I would suggest trying to tie it up with a contract.... but in no means a contract will not guarantee the short sale going through.

Short sales can take a very long time and can be very aggravating for a buyer. Patience is a must needed virtue when it comes to purchasing a short sale. Just because you have an offer on a property does not mean that an auction will be stopped. Its really hard to give you a great answer because their are so many variable involved.
Web Reference:  http://www.thehousewiz.com
1 vote
Richard Schu…, Agent, Los Angeles, CA
Wed Mar 10, 2010
You may benefit from having a buyers agent on your side who can speak with the listing agent for the property and help navigate the process. It's possible they have already chosen an offer to submit to the bank and are waiting on short sale approval. And if the short sale isn't approved in time (before the trustee sale), then the home can go into foreclosure. That may leave you another opportunity though, as the home will go back on the market, likely with a different listing agent. In which case you should pursue that immediately. A good agent will help you with some of your questions about the liens and such along the way (or refer you to a real estate legal expert).

Good luck!

Richard Schulman
Keller Williams Real Estate
1 vote
The Roskelly…, Agent, Gambrills, MD
Thu Jun 17, 2010
Oh my goodness go back to that real estate attorney and ask him what if any your chances are of getting the property short sale and the likelihood that the IRS liens will follow the house and not the previous owner.
0 votes
Heidi Zizza, Agent, Framingham, MA
Wed Mar 10, 2010
Are you working with a buyers agent? Yes they can still foreclose :(
Web Reference:  http://www.mdmrealtyinc.com
0 votes
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