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Looking for some advice on buying a foreclosure/short sale property. We saw a house that we liked and were preparing to make an offer when we were told it was "going back to the bank." our realtor told us we can't make an offer now because of this. We would like to get this house. Anyone have experience with distressed properties and have any advice on what to do about this? I don't think our realtor has a lot of experience in distressed properties. I don't want to lose out on something b/c we weren't aggressive enuff
in pursuing the situation if there's a way to get this done.
My details may be a little off, but this is how it was explained to me:
Going back to the bank means it is either scheduled to be sold at county auction or has already sold at auction and is currently in transition to the new buyer (most likely a bank). To go after it takes several months of chasing paper trails. Meanwhile, there is a 6 mth wait period after it goes back to the bank because the previous owners have a 6mth period to attempt to get the property back. The property can't transition until that wait period is up - for example, if the bank foreclosed on it prematurely, the previous owners can take them to court and get the property back. So, the bank can't sell it again until the grace period has been satisfied, or there is a whole new mess to undo.
There is a difference between foreclosure (faster to purchase once approved) and short sale (could take for ever to clear). Banks do a poor jobs on short sales, you need a lot of patience and expect the approved price to increase for hidden costs.
Worth considering a short sale for investment purpose only, when no emotional strings are involved if the sale does not go through at the end.
My details may be a little off, but this is how it was explained to me:
Going back to the bank means it is either scheduled to be sold at county auction or has already sold at auction and is currently in transition to the new buyer (most likely a bank). To go after it takes several months of chasing paper trails. Meanwhile, there is a 6 mth wait period after it goes back to the bank because the previous owners have a 6mth period to attempt to get the property back. The property can't transition until that wait period is up - for example, if the bank foreclosed on it prematurely, the previous owners can take them to court and get the property back. So, the bank can't sell it again until the grace period has been satisfied, or there is a whole new mess to undo.
Looking for some advice on buying a foreclosure/short sale property. We saw a house that we liked and were preparing to make an offer when we were told it was "going back to the bank." our realtor told us we can't make an offer now because of this. We would like to get this house. Anyone have experience with distressed properties and have any advice on what to do about this? I don't think our realtor has a lot of experience in distressed properties. I don't want to lose out on something b/c we weren't aggressive enuff
in pursuing the situation if there's a way to get this done.
Thanks!
There are basically two ways to handle it at this stage.
This is assuming the property is NOT currently listed for sale.
(1) Wait until the foreclosure hearing, go bid on the house. You will need cash to purchase it this way. Also, you will not be able to go into the home, inspect the home, appraise the home. You need an attorney to complete a full title search and make sure there are not tax liens, mechanics liens, etc.. etc..
(2) Wait until the bank completes the foreclosure and it becomes REO. They will list the home on MLS. You will have the chance to make an offer. If your offer is accepted you can inspect the property, appraise the property, obtain financing on the property, etc.. etc..
Most buyers wait until the bank sells it themselves as REO property on MLS. This way the process is much easier on a buyer and they have the protections of an inspection period, etc..
The majority of purchases that take place at the courthouse are completed by investors familiar with the process and willing to take on the additional risk.
Thanks Charlottean! That was so helpful! We've seen the inside of the house but I don't think I'd be up for the courthouse route. I think we'll wait for it to come back on the market and just be ready to jump on it.
Thanks Charlottean! That was so helpful! We've seen the inside of the house but I don't think I'd be up for the courthouse route. I think we'll wait for it to come back on the market and just be ready to jump on it.
In the meantime, I'd definitely hook up with a realtor who knows the ins and outs of distressed properties. Believe me, it makes a TON of difference. Though I am on the opposite side of the coin and we are trying to rid ourselves of a distressed property in Columbia. Once we got a short sale "expert", things went a bit smoother (not completely smooth) than when we were trying with another realtor who had no direct experience.
In the meantime, I'd definitely hook up with a realtor who knows the ins and outs of distressed properties. Believe me, it makes a TON of difference. Though I am on the opposite side of the coin and we are trying to rid ourselves of a distressed property in Columbia. Once we got a short sale "expert", things went a bit smoother (not completely smooth) than when we were trying with another realtor who had no direct experience.
I agree. Some realtors will will be dishonest about distressed properties in order to drive you away from them because they are a lot more work for the realtor. So you might want to double check to make sure what your realtor told you is true.
^This is why I say as a buyer, you should never sign a buyer's agency with an agent.
All agents should ask you if you already work with an agent?
What will be your answer?
Do you feel OK with having an agent running around to find you a property, just so you can pick up another one at the last minute?
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