Like I’ve mentioned in the past month, things have been a tad hectic. This is good news for people wanting to buy and sell (of which there are many more than you may be lead to believe lol) and good for me because work keeps me out of trouble. Several of my clients have wound up putting in offers on either a short sale listing (when a seller is asking their lender to accept an offer on their home that is less than they owe) or on a foreclosure listing (already lender/bank owned). Just a few observations about this whole thing from the trenches.
First, foreclosures. The banks own them and make us all wait until they are good and ready to deal with our offers. Sometimes this happens in a few weeks and sometimes….not! I had one offer that was literally in limbo for about six weeks. This means no word on whether or not they would accept my buyers offer. Luckily for me (and other agents seem to have had less luck), this was not the norm on my foreclosure buys. I first of all was extremely lucky to be working with agents who kept me informed (even if it was only once a week or so, and even if all they had to say was ‘no word yet’). My second observation about foreclosure purchases is that you have to realize the bank may negotiate or they may simply come back and say no we reject your offer. So if you look at a bank owned home and want to write an offer, be aware that your first offer may be the only chance you have to do it so talk with your agent and be comfortable with what you write. I try to tell people to role play, pretend the bank comes back and says no we won’t accept your offer we are taking someone else’s offer (because that is one thing you also may not be privy too as a buyer, whether or not they have more than one offer on the table). When you get this answer, will you be comfortable that you did the best you wanted to do on that particular home.
Then there are short sales. These have been the bain of my existence for the last few months. I have a seller who tried to negotiate with a lender who shall remain nameless who never really stayed in communication with any of us. We had two offers on the home. After two months one person said forget it I’m withdrawing my offer (can you blame them?) and then a month and a half later the second offer got withdrawn. Then unluckily for me, a second client wound up with seemingly uncooperative lenders who kept them ‘on the hook’ without answers and so we wound up losing the offer on their home as well. I have to say that I would much rather work with a foreclosure sale after all of this than a short sale.
You have to wonder, with all the homes these lenders own when they supposedly don’t want to be in real estate just do loans, why they are not more communicative. Such is life in the big city. Peace Out – 3C
LOL spell check says bain is not a word. What say you? 
14 responses so far ↓
1 Elaine Reese // Jun 9, 2008 at 11:17 pm
I’ve written a couple short-sale offers that didn’t go anywhere. I don’t really do anything in that market, but did have someone explain that a seller might prefer to have the home go to foreclosure because then their debt would be wiped out. Whereas with the short sale, they would still have all the other debts, plus, would have to claim the mortgage write-off as income.
Is that correct from what you’ve experienced?
Elaine Reese’s last blog post..Buy a home that Dad DOESN?T have to fix!
2 Carole Cohen // Jun 10, 2008 at 12:09 am
Elaine I imagine you are right about the debts and it’s true about the write off (although the new Federal Bill just passed put a moratorium I think, on the taxes due for the difference). But one thing I know to be true is that you have a foreclosure on your record longer than a short sale. I guess I would suggest people get a professional opinion. Here we have the GCleve Neighborhood Hsg Services Group amont others, and I bet there are non-profits in the Columbus area who could advise the same — as well as mortgage lenders themselves. You make a really good point, that people need to explore the long term ramifications of the choices they make.
3 Lou // Jun 10, 2008 at 1:12 pm
Columbus Housing Partnership is a great resource for in and around Columbus.
I think with Foley’s bill being signed by the Governor today, it will make banks less hesitant to hang on to homes in that the process of having them in the banks name will begin much sooner after sheriff’s sale. Represenative Foley has been working on this of at least a year, it is a good thing for our neighborhoods.
CHP’s website is http://www.chpcolumbus.org.
Just a quick lunch break…at 2:15.
4 Carole Cohen // Jun 10, 2008 at 4:19 pm
Lou, sounds like you had a long work morning. So the Foley Bill will allow banks to accept ownership sooner which could be good because it would allow them to make decisions on offers sooner, at least that is how I analyze it. That can only be good news. Less time for homes to be vandalized while vacant too. Very good for the neighborhood. Thanks for the Columbus link!
5 Walter Smith // Jul 13, 2008 at 7:24 am
Do you think a foreclosure inspection before you buy is a good way of knowing how much equity you get.
6 Carole Cohen // Jul 13, 2008 at 10:23 am
Walter, by an inspection do you mean an appraisal? To determine market value of a house you would need to hire an appraiser. Easier for you would be to have the real estate agent you are working with do comps for you and provide you with information on what has sold on that street and surrounding streets in the last six months or so.
7 Carole Cohen // Jul 13, 2008 at 10:33 am
Walter one more thing to be clear. You actually should have an inspection as well. It won’t tell you about equity but it will give you a better idea of condition of the house. But you will be writing an offer and you make the offer contingent upon having an inspection within about a week after you have an accepted offer.
8 Walter Smith // Jul 13, 2008 at 11:05 am
Thanks Carole a friend was talking about foreclosure inspections , to get an idea of possible damage to a property before making a offer, seems the $250.00 inspection would be prudent.
9 Carole Cohen // Jul 13, 2008 at 11:32 am
absolutely and good luck Walter !
10 Walter Smith // Jul 13, 2008 at 1:28 pm
Carole i hope you dont mind me asking, but what is your profession? I am a Chemical Quality Control Technician in South Chicago .
11 Carole Cohen // Jul 13, 2008 at 1:38 pm
Chicago is a beautiful town, I know some great Realtors® there.
Walter, I am a Realtor® with Howard Hanna here in Cleveland.
12 Carole Cohen // Jul 13, 2008 at 1:44 pm
Walter, for what kind of industry?
13 Walter Smith // Jul 13, 2008 at 2:44 pm
The Mining industry i actually work at a lime company . My oldest son lives in cleveland. I really would like to work from home and came across information about foreclosure home inspections with an outfit from East lansing Michigan (foreclosurebankinspector.com) do realtors use this service ?
14 Carole Cohen // Jul 13, 2008 at 3:18 pm
Very cool, Walter. I can’t speak for Michigan practices, but here, we tend to handle it a bit differently if we are residential Realtors®. We get an accepted purchase offer and then go on to a typical inspection company. It’s possible the REO specialists here use a service like that, not sure. My suggestion would be to email a Michigan Realtor® I know named Maureen Francis: Maureen@MaureenFrancis.com .
She will be able to advise you better than I can from Ohio!
If you are talking about purchasing foreclosures from Ohio/NE Ohio on the other hand, we use ASHI certified inspectors and you can go to http://www.ashi.org/ to find one local to you.
Just a few other ideas!
Leave a Comment