Foreclosure. Wait or not to wait? (short sales, real estate, foreclosures)

[New2Maui]

I recently went on a trip to Maui and loved it. We decided to move there and found a nice condo we like. We learned from an insider source that the bank was going to foreclose on the property in 1 month. If we like the place should we put in an offer now or wait till it foreclose. Would we get a better bargain now or later and do we risk losing it once the bank puts it on the market.
Mahalo

[mdand3boys]

If you do it now, you are doing a short sale. After the fact, it is a foreclosure sale. It can go either way. You need to do your homework though. What are the association fees? Is the condo on fee simple (owned) or leased land? Hawaii real estate is not like the mainland. There are a lot of pitfalls.
You need to deal with a professional real estate agent that specializes in the area you are looking at.

[hotzcatz]

Put in an offer now and expect it to take about a year to close if it does at all. We put in an offer on a short sale but it will most likely be a foreclosure before it is all said and done if it ever is at all. Educate yourself on the differences between the various methods of real estate sales and expect it to take a long time.

[New2Maui]

The condo is fee simple and I know she is falling behind on HOA dues. They are not posting the condo has short sale and I heard from other sources that they are foreclosing on the condo next month. I have a real estate agent and she doesn't know about the foreclosure. I think the owner wants to sale quickly before foreclosure. Although it smell like a deal it could also be a nightmare.

[cynmkolohe]

Anyone considering the purchase of a short sale or foreclosure should sit down with his/her agent to have a good heart-to-heart about short sales, distressed properties and the foreclosure process. Ask your agent to show you a DISTRESSED PROPERTY ADDENDUM TO EXCLUSIVE RIGHT-TO-SELL LISTING AGREEMENT (a Hawaii Association of REALTORS® Standard Form) and a DISTRESSED PROPERTY ADDENDUM TO PURCHASE CONTRACT (also a HAR Standard Form and sorry about the caps, I pasted these titles from an actual form).

If this property is listed in the MLS and is really only a month from foreclosure, there are obligations that the listing agent has--assuming the Seller is keeping the agent informed as these agreements require--to make certain disclosures and your agent should have access to that information.

For those who like to see the gory details, this is a brief excerpt from the Listing Agreement Addendum:

2. Seller’s Obligation: Seller hereby agrees to notify Brokerage Firm immediately if the Property is, or at any time during the term of the Exclusive Right-to-Sell Listing Agreement becomes, a Distressed Property and/or Seller uses, hires or retains a Distressed Property Consultant. Should Seller fail to so notify Brokerage Firm, Seller shall indemnify and hold Brokerage Firm harmless from any claims arising therefrom or related thereto.

3. Distressed Property Addendum to Purchase Contract: Seller agrees to use the Distressed Property Addendum to the Purchase Contract, which has been attached for reference, with any Purchase Contract in which Seller engages during the term of the Exclusive Right-to-Sell Listing Agreement, or any applicable protection period, should the Property be, or become, a Distressed Property.

**This post is for information purposes only and should not be construed as legal advice. -- Covering my bases!

[imcurious]

You need real-time expert advice from a Realtor. There are many, many factors to consider. Don't just guess what to do. Become informed.

[New2Maui]

Thanks a lot for the input. This is a tricky situation as the seller is the realtor and seems like a strange individual. I have a realtor but I haven't informed her of the possible forclosure due to the fact I received this information from a third party who probably shouldn't have told me.
I think it's time for my agent to know the dirty details.
Thanks again for all the great info!

[Calico Salsa]

It's not as easy as you might think to buy foreclosures. You'll have to be in person at the auction, or have a legal agent there to bid for you. You'll have to have a percentage of the bid amount in cash, and show ability to render the remainder. If you have a lawyer attend for you, be prepared to pay about $300/hour plus expenses, and the hours include travel time. Sometimes the auction gets postponed, so you might need to make more than one trip.

Sometimes a house will be put into foreclosure then yanked back out as the owner finds another financing deal.

If you aren't being open with your real estate agent, then they don't have the information and therefore the ability to advise you properly or to do their job correctly. If you end up in a bind, you can't blame your agent because you won't have given them the chance to prevent problems.

The home we bought was had started in the foreclosure process and we weren't told by the seller nor the selling agent. We found out when we had the title search done, and then it cost us a lot to scramble around, get a lawyer involved, move up close dates... the already strained seller/buyer relationship suffered as we had more expenses and hassled involved in buying the house.

Get everything out in the open, and you'll see the realities of whether this is likely to happen.