Where do I go for expert advice with purchase of a short sale/foreclosure?

Asked by Kyler, Chicago, IL Tue Apr 9, 2013

I placed an offer on a short sale property in February. The seller immediately accepted the offer. Since then it's been weekly delays and requests for new/different information and dates. Now the bank wants two more months to decide.

I'm told that the property is scheduled for a Sheriff's sale in a couple weeks. I wonder if I should forget the short sale and try to buy it at auction. I'm new to all of this and need some good insight. The realtor I was using is not much help.

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26
Bob Brandt’s answer
Bob Brandt, Agent, Schaumburg, IL
Fri Apr 26, 2013
Ask your attorney and your own Realtor for more advice and read the paperwork you signed.
It may not go together at all, but you must have known that when you made the offer because the bank can do what they want.
0 votes
Erik Sachs, Agent, Chicago, IL
Tue Apr 9, 2013
Kyler-

You are married to your buying realtor right now, the only thing you can control is which attorney represents you. Hire a good one that is aggressive and knows what they are doing.

A few notes:

When you finally hear back from the bank do not be surprised if they counter your offer (that the seller signed) at a higher price.

Also, many times the bank/loan servicer will bid the amount of the debt at the auction and it will only sell if someone wants to bid over the debt. This usually makes the auction part of a series of events that occur during the foreclosure process not the event that exits the process.

Which bank has the property? Do you know anything about the background of the team representing the seller? Find out how many notes/liens are recorded against the property. Also try to find out if the bank that owns the loan is also the principle or if they are servicing the loan for an investor.

A short sale is a war of attrition, if you are not up for it get out now. You need people representing you that can prepare you for the realities of buying a short sale. It also sounds like you need to do some soul searching to determine whether or not you are willing to wait out the process for this home. You also need more info to make this decision.

This should short sell before it goes bank owned (majority of the time with willing participants on each side).

Best of luck with the deal.

Erik Sachs, CDPE
Broker/Owner
RpV Realty and Development
Cell 773/368-5515
Email esachs@rpvinc.com
1 vote
Ivan Sagel, Agent, Chicago, IL
Tue Apr 9, 2013
Kyler,

There is no guarantee of clean title if you buy it at the sherriff's auction. The short sale is a bit of a waiting game. They usually take 3-6 months to get an answer from the bank and the answer might be no. Feel free to give me a call prior to your next purchase or sale.

Best regards,

Ivan Sagel
@properties
312.515.7823
Ivan@atproperties.com
http://www.atproperties.com/agents/IvanSagel

I always appreciate your referrals…
1 vote
Philip Sencer, Agent, Chicago, IL
Sun May 18, 2014
The seller does not care what the price is. He just wants a contract so the 'process' can start and it can take 2-5mo before the bank is ready to decide IF they will accept the price. The market has been increasing so often values are up and they want more money than the contract price. If you do not like that you can walk away.
Most banks prefer to do a short sale because it costs them much less than to take over the property as a foreclosure and most foreclosures go back in the MLS, not an Auction. Auctions are a very bad way to buy something. You really need to do all your homework....legal etc BEFORE you bid. It is not for newbees.
0 votes
Terry McCarl…, Agent, Cape Coral, FL
Wed May 1, 2013
Buying at the foreclosure auction comes with risk so much research needs done prior to bidding at the auction. Find a good Realtor® and attorney to assist you with this.
0 votes
Riccardo War…, Agent, Bolingbrook, IL
Wed May 1, 2013
You should have a realtor and an attorney helping you out with this. Not to mention, a mortgage pro.

Sean Cochran
Quality Mortgage Lending
630-330-2229 cell
630-470-6830 office
http://www.qmlending.com
*We lend FHA down to a 600 Middle Fico
*No Money Down USDA Loans
*90% LTV Jumbo Loans with no mortgage insurance
0 votes
Mike Opyd, Agent, Chicago, IL
Tue Apr 30, 2013
Your agent and attorney should be able to help you out. I would reach out to them. See if they can get you an extension.
0 votes
Brendan Ross, Agent, Chicago, IL
Fri Apr 26, 2013
Kyler,

As an experienced short sale broker and attorney, I can tell you everything you need to know. Feel free to give me a call or send me an email. Best of luck.
Web Reference:  http://www.chicagorelaw.com
0 votes
Cassey Rodri…, , Rancho Cucamonga, CA
Fri Apr 12, 2013
Hi Kyler,

I think this article will help you leaderscorpfinancial.com/what-is-a-short-sale .
0 votes
stephen webb…, Agent, Kirkland, WA
Thu Apr 11, 2013
Kyler
Sorry to hear your situation. As you research you will find many people waiting in the same setup. Unfortunilty in many areas prices are rising as people are waiting for news on their short sale.
Too many games played with short sales.
Will a bank sell with a short sale for less than they will recieve at auction or foreclosure? Most lenders know property values are increasing in their area. Now they are in control of an appreciating asset.
I suggest you gather some objective information. Start with article #23 Short Sale, on Your-Road-Home.
My suggestion is to begin shopping for the best buy in your area, and be ready to move forward with another offer on another property. But most importantly continue to gather objective information.
Best of Luck, Stephen Webber
Web Reference:  http://Your-Road-Home.com
0 votes
JIM Michaels, Agent, Chicago, IL
Wed Apr 10, 2013
Patience is the key to shortsales
0 votes
Helen Mandel, , Chicago, IL
Wed Apr 10, 2013
It is not uncomon for banks to take a long time on a short sale.
Find a knowlegable agent that can help you through the process.
0 votes
Riccardo War…, Agent, Bolingbrook, IL
Wed Apr 10, 2013
I know a great short sale agent that I can refer you to. In addition, you should have your attorney involved.

Sean Cochran
Quality Mortgage Lending
http://www.qmlending.com
630-330-2229
0 votes
Mike Opyd, Agent, Chicago, IL
Tue Apr 9, 2013
Reach out to an agent you trust who has dealt with these types of properties in the past. Short sales/foreclosures are not simple transactions so a person with knowledge is key.
0 votes
Matt Laricy, Agent, Chicago, IL
Tue Apr 9, 2013
I would speak to a couple agents that are experienced in this sort of thing. They could help steer you in the right direction.
0 votes
Joanne Bullen, Agent, Chicago, IL
Tue Apr 9, 2013
One rule that is true for all short sales is that they are not short. That is the only rule that you can count on. All banks are different all negotiators have their own way of handling the situation. The most important factor is the sellers agent and attorney if the seller has a good team they will get you through this even though your agent may not know what they are doing.
It is important though that all the paper work the bank requests is done in a timely fashion. If you don't meet their dead line they will cancel the deal. A good agent will be able to keep it on track for you though.
0 votes
David Hanna, Agent, Chicago, IL
Tue Apr 9, 2013
We preach this here all the time, hire a Realtor who has short sale experience, who works with a professional negotiator and expect short sales are anything but short.
You are less than 60 days out from the offer, a very short time line to expect this to be done, and there are too many factors I don't know to give an answer if this is normal or unusual in your circumstance.

YOU do not have much to gain by being impatient, you have limited choices and allies, I suggest you mend the fence with your agent, engage your attorney, and be careful you do not make things worse with further actions based on emotion and a lack of good advice.
0 votes
Pete Burke, Agent, Schaumburg, IL
Tue Apr 9, 2013
You are witness to the change in the real estate purchase process given the large inventory of foreclosures and short sales. Selecting a professional to assist you is critical as you are now discovering. Did you interview your agent before you engaged that agent to assist you? Experience and professionalism get deals done! Does your agent have an SFR designation? (SFR is the National Association if Realtors approved designation SHORT SALES and FORECLOSURE RESOURCE). Look for an agent that has SFR after their name. You are asking basic short sale process questions your agent should have been able to answer.
In this market, the buyer needs to be sure they are working with an agent that has short sale experience and training! It seems like your agent did not / was not able to give you some perspective on the timeline / series of events to get to closing.
You need an experienced Realtor and attorney.

Pete Burke SFR
Chicago
0 votes
Jose Hernand…, Agent, Chicago, IL
Tue Apr 9, 2013
You will have plenty of competition at auction. You might have to forget about it and start looking for an agent to assist you that has "Experience with short sales". An experienced agent will know what to look for in a listing and advise you whether to submit an offer and wait or walk away.

Good luck!
0 votes
Manuel Brown, Agent, Chicago, IL
Tue Apr 9, 2013
Kyler,

Welcome to the world of Short Sales. Unless a seller has a truly experienced short sale attorney working for them staying of the foreclosure can be daunting. Personally when I have worked with buyers that are OK with trying to purchase a short sale a quiz the listing broker on his/her experience as well as ask questions about the short sale negotiators experience, and if the home has already been accepted on some level as a short sale from the lender.

My litmus test is based on my experience as a listing agent for a short sale and I will not take on a short sale client unless the seller uses an experienced short sale attorney. I personally will not list a short sale unless the seller uses the(an) attorney firm I know has a high success rate (they take no fees, they get paid from the closing by the bank).

Before I show a short sale to a client I interview the selling broker to try to determine the probability of making it to close. It is a best guess. I way this out with my clients and than I let them decide, there is no exact science to it because every short sale has its own set of problems.
0 votes
Edward Bohrer, Agent, Long Grove, IL
Tue Apr 9, 2013
If the mortgage holder wants that much time and the sheriff’s sale is in 2 weeks, it does not sound likely the short sale will get approved. There are a number of reasons the bank would rather take over the property than short sale it, which, as stated and you have experienced, takes much longer to accomplish than an REO or bank owned property. These days, few people will bid at the sheriff’s sale other than the bank because of unknown lien, tax and title issues. Once the bank bids and takes over the property at the sale, there will be at least a 30 day confirmation period before any further action will be taken. If there are people still living in it, it could take much longer if they decide to fight it and the bank starts an eviction process. If it is vacant, the bank can start the disposal process after the 30 days. Typically they hire a Realtor to market it (not normally the same one who has it listed now) but also may need other services to ready the property. There may be other avenues to “side step” some of this and cut down some of time and give you a better chance of eventually getting it, if this is the property you really want.
0 votes
Randall Lanc…, Agent, Chicago, IL
Tue Apr 9, 2013
I recommend a CDPE (Certified Distressed Property Expert). Which I am. Please visit my website at http://www.idealhomesinchicagoland.com. Please call me on my cell phone with any questions, or guidance that you may need.
0 votes
Geoff Ommen, Agent, Barrington, IL
Tue Apr 9, 2013
Kyler

I will selfishly say you want to look for someone who can navigate the system for you. They either need to be partnered with lawyers or negotiators that deal with short sales. Even though you are on the buy side, they need to have the knowledge to be able to help you out. I have recently been providing some basic information on my Trulia blog that you may find helpful.

If you offered in February, you most likely signed a short sale addendum with a 90 day clause. The sheriff sale and short sale are two different animals. If you decide you want to go a different route, feel free to reach out.

Geoff Ommen
Broker Baird & Warner
847-271-2622
geoff.ommen@bairdwarner.com
http://www.geoffgetsit.com
0 votes
Philip Sencer, Agent, Chicago, IL
Tue Apr 9, 2013
It is common for the type of delays you are seeing. Short sales take forever and neither agent has any control over the process. They just do what the bank tells them to do. If you are in a rush, do not go for a short sale. They often wait until the last day to postpone the sheffifs sale so that means nothing. Why do you think it will go to auction. REO's usually are listed int he MLS.
0 votes
, ,
Tue Apr 9, 2013
In this case you are stuck until the bank makes a move - continue your search so you don't miss out on a better opportunity while you wait for a response.
Sam Sharp
Senior VP of Mortgage Lending
Guaranteed Rate
773 290 0455
0 votes
Ron Thomas, Agent, Fresno, CA
Tue Apr 9, 2013
We have heard this senario hundreds, maybe thousands, of times in the last few years:
If the Bank says it will 2 months; it probably will be 5 months. I have seen a year!
Up to you: If you are patient and really, really want the house; then be patient.
If you will kick yourself for waiting for nothing, and miss out on the deals the next few months; then walk away.
Waiting for the Trustee Sale is not much better; it will 3-5 months until that is Listed too.
There are a lot of houses out there, maybe a better home and deal will reveal itself.
0 votes
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