Posted: 1/12/2010 4:55:13 PM EDT
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I've been googling to no avail, and since Foreclosures still seem to be a taboo subject for banks and real estate people, I thought I'd ask here...
There is a nice house in our town that is scheduled to go to auction on Jan 22 (in about a week.) however, back in December someone put an offer on it and it's been in a pending status ever since. They've asked for an back up offer, which makes sense in this market. I know it can take several months to have a short sale accepted b/c it has to be accepted by all the invested parties. I've also heard that the loans are chopped up and sold every which way and that frequently the smaller investors will block short sales because they won't get anything out of them (even if it's going to auction for much less.) Not sure how true this is, it's just what I hear. 
As the auction date draws near, I'm wondering what will happen to this house? Will it go to auction while it's pending? Will they accept or reject the offer before auction? Will they keep the offer in reserve in case it doesn't sell, but try to sell anyway? ect... 
Basically I'm trying to figure out how the finer details of the foreclosure process works. (Yeah, I know, short sale ––> auction ––> REO.) To answer other questions: Yes, I'm potentially interested in this house, but am in no position to buy a house right now. If this house is available as an REO when I'm in the market, I certainly would like to go take a look at it. I'm not really interested in trying to buy a short sale (for some of the reasons listed above.) and am not comfortable going to an auction. |
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The bank will bid up to at least the mortgage balance plus any other expenses they have inured.
They are very likely to hold off accepting any contract until after the auction. Bidding at auctions is not for the faint of heart or those without a lot of $$. In many cases you need a certified check for a couple tens of thousands to even bid (it does depend on what they thik the place could go for) with closing in a very short (7-10 days) time frame. No contingencies are allowed. No inspections, no financing, NONE. If you default after winning the auction they may keep the money you put up to participate, and after the auctionis over they may be a redemption period (depends on the state). In a lot of cases the property changes to REO since the bank buys its own note. It is usually easier to deal with the bank at that point since they want the place off their books, but they are still slow. The last REO I purchased still took 3 months, and they covered the old mortgage (though not all the bills they ran up). |