Short sale vs Trustee sale does one trump the other?

Asked by Tnp, 92405 Mon Oct 4, 2010

Made an offer on a short sale property on 9/8/10. Neither I or my broker has heard anything from the broker who listed the property. The broker failed to returned calls. On 10/4/10 I discovered that the property had a notice of Trustee sale recorded on 9/24/10. Do I have any recourse, do I have a legitimate claim to the property?

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Gina Roquet, Agent, Highland, CA
Tue Oct 5, 2010
BEST ANSWER
Your broker/realtor should have stayed on top of the listing agent to see if your or another offer was accepted. The accepted offer gets sent to the bank and this will delay the trustee sale, if the paperwork was submitted properly and on time to the bank. Doesn't sound like any of this was done and the property fell into a forelosure date.
0 votes
Jerry Current, Agent, Pasadena, CA
Tue Feb 8, 2011
Has the property in question actually gone to sale yet? If not, then it probably means the bank is working with the homeowner to complete the short sale approval. The bank will continue working the foreclosure process, even while working on a short sale approval. They don't want to lose any time...just in case. What usually ends up happening is the sale date is postponed in 30 day increments until either the short sale is worked out, or time runs out and the bank decides to consummate the foreclosure. I'd get your agent to get on the listing agent to find out what is happening. Unfortunately, there are too many listing agents working short sales who do not give professional courtesy to the very agents trying to help sell their listing. But as the old saying goes - The squeaky wheel gets oiled.
0 votes
Jane Grant, Agent, Aguanga, CA
Tue Oct 5, 2010
All short sales are "Subject to Bank Approval", so even though the owner who is requesting the bank to go through with a short sale the ultimate approval has to come from the bank. Now that it is going through a formal foreclsoure, the owner who signed your offer is no longer the owner.

The owner is now the bank and your offer must be submitted directly to the bank.

~~~
0 votes
Suzanne MacD…, Agent, Succasunna, NJ
Tue Oct 5, 2010
First, this is probably best answered by an attorney and I am not an attorney. The attorney will need more information than is included here, like, was your offer accepted and counter-signed? Did you make an earnest money deposit? Where was the deposit held? What is the attorney review period in your state? Did you and the seller complete attorney review?

My instinct says no, you have no recourse. Short sales are difficult at best. Sellers sometimes feel they have nothing to lose, don't quite grasp the consequences of ending up with a foreclosure instead, and can be uncooperative. They just stick their heads in the sand like an ostrich and no one can get them to budge. It may not be the listing agent's fault, either. But if you feel strongly about the situation, consult an attorney.
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