Thread: Put an offer on a short-sale - 4 months later it's being auctioned off?

This does happen-

Has the listing agent/seller attempted to extend the trustee sales date?

Hard to say whose fault, sometimes the bank chooses to foreclosure instead of accepting a short sale.

I talked with the seller's agent yesterday to just get his opinion on what in the world happened. He said that at some point (he doesn't know when) the investors decided that they just wanted to foreclose rather than complete the short-sale.

I'm not quite sure why they are willing to auction the house off for $400 less than my contracted offer (and they never attempted a counter-offer) - but if thats what they want to do, thats their call.

The most frustrating part of this ordeal is the lack of communication. How do I have a contract on a house for 3.5 months, and I hear its going to auction the DAY BEFORE? There's a miscommunication somewhere - I should have received a counteroffer or a rejection on my contract before it got to that point.

When a house is under contract, then is going to auction - who is told about the auction? In this case, both realtors said they became aware of the auction by the seller (who was mailed a letter, to his old address, then forwarded to his new address). Shouldn't the seller's realtor have found out about the investor's plan from the bank - if he was keeping up with the bank?

I cannot control the communication between the bank - investors - seller's agent, but I did pick my realtor because he/she came across as being very experienced with short sales. And I relied on him/her to make sure that the other parties were communicating. I'm not trying to point the blame, but ultimately, I feel like someone wasn't keeping up with it as much as they should have.

Imagine waiting for 3.5 months for a house, and hear status updates every 3-4 weeks, then 1 day you all of a sudden hear its being auctioned off the next day? There's a disconnect somewhere.

I guess one piece of advice to buyers with a contract on short-sales - check the paper daily to see if the house your contract is on, is listed in the paper as a foreclosure! That appears to be the fastest way to find out.

Hello-

I understand your frustration - but there are a few things that need to be stated:

1st- You never had a contract. A short sale contract always contains a "subject to" provision. This means it is subject to the mortgage holders approval. So until the lender signed off - you had a written offer - but no executable (enforceable) contract.

2nd- The mortgage holder is under no obligation to respond to you - the seller - or any representing agents. Once the mortgage payments have been missed and is in violation of the promissory note signed at the closing table - the lender really is in control of the situation.

Clearly the lender in this instance has his own agenda - and didn't want to accept your offer for any number of reasons.

Still - that doesn't excuse very poor business behavior in this instance. Furthermore- there probably is not much the sellers agent or your agent could have done to bring this deal off.

Better luck next time !!

Glenn

This happens all the time.

Short sales are very difficult and the bank seems to have no structured process that works every time.

There is no dignity in short sales and the bank couldn't seem to care less about offers.

I have been trying to reach my bank to submit additional offers but no one will contact me or tell me how to submit the higher offer into their system.

It's very frustrating...imagine how the seller feels.

Thanks for all of your input. I understand that short-sales are difficult - but I still can wrap my head around the whole lack of communication.

If you have a contract on a house, you shouldn't find out your offer was 'rejected' the day before they take it to an auction.

People have to be held responsible, especially when they claim that they have the 'expertise' to get a short-sale done. I know my realtor isn't the only one to blame, but if the other parties aren't communicating, I'd expect my realtor to initiate the communication between all parties.

I would say that if your offer was only $500 less than the starting price of the Auction that the bank still feels your price was too low.

My offer on the home was 210,000 and the starting bid at auction was 209,600. Anyone could have bought the home yesterday for 209,600...

The only difference between that and my offer was the agent's commission, so roughly $12,000.

The house ended up back with the lender because no one bid, and I've been told it takes about 6 months for a house to get back on the market after the auction. Is that true?

If that is true, there are a number of things adding up that aren't in the lenders favor, in my opinion.

- In 6 months, there may not be another government incentive for buyers - that would most likely decrease demand for homes, which would then drive prices down even further.

- There is routine maintenance on houses to keep them in selling condition - yard work, making sure the systems are working properly, just routine checks on the property. This specific property had the owners living in it until last month...so it was in fairly good shape until then.

Those are just a couple things going against them. Add to that, the house had been on the market since July 2009 and had gradually dropped its price from 255,000 - 230,000...and my offer (210K) in October was the first and only offer to date.

Even if they thought my offer was low, I wouldnt think it was THAT low and wouldn't even deserve a counter offer...they didnt even see if I was willing to go higher!

Things just don't add up in my mind...

I will tell you that exact scenario is happening all around the county. IMHO I would not put any faith nor risk involved on trying to score a great deal on short sales.

Stop complaining and looking for someone to blame. Your silver lining is shinning in your face. Buy the house directly from the bank and you save the money the bank pi$$ed away.