H/T Contrarian for posting the link to today's Washington Post article on buying foreclosures, which in typical Post fashion, finds two or three anecdotal stories and tries to freak its readers out. There's always an obligatory bad guy du jour -- this time, the banks.
First, we are set up with this:
"Bargain Hunters Flock to Bid on Bank-Owned Homes, but Settlement Is Often Delayed.""Often" -- is that twice as often as when dealing with a regular seller? Or three times as often? Or just "oftener?"
"As bargain hunters turn their attention to foreclosures, many are discovering the toughest challenge is dealing with the banks that repossessed the homes"."Many" -- is that like one quarter? One half? If Northern Virginia sales are any indication, the banks are getting this done to some degree.
Next there's the quintessential victim story -- in this case a buyer who can't figure out why the bank's delaying closing. After four months, they got proactive and went to the courthouse -- and realized that "all the bank needed to do was submit paperwork to the court confirming that it had foreclosed on the house prior to the bankruptcy filing".
Did they have a real estate agent? Wouldn't an experienced agent know to look up the court records immediately, and not four months into it?
"But that letter didn't materialize until their congressman, Rep. John Sarbanes (D-Md.), intervened".Did his staffers use Google to make a phone call to the right people? Or did he threaten to take away their bonuses? What did he do?
"Things go wrong, and it takes the bank a lot longer to deal with them," said Vivianne Couts, a Virginia real estate agent. "There are a lot more people involved, many more layers. The Realtor can't always call the bank and say, 'What's going on here?'"Actually, you can. We bought a bank-owned property last autumn. When I had an issue, I discovered it was because of the bank's local real estate agent not getting her job done fast enough. I called some very-surprised ladies at Wells Fargo, and they impressed me with their efficient competence and instant e-mailing of a needed document. (Google was our friend -- it took me about five minutes to find the right person to call).
Next up, Foreclosure Buying Success Stories. (Do you think the Post would dare?)
10 comments:
That was awesome Harriet. Makes me miss Tanta...
Yee Gad-
Now I'm leary about bidding on Foreclosures, in addition to Short Sales...
Whats a Buyer to do?
Guess I'll have to lowball Ma & Pa Re-Seller...
We also bought a foreclosure last fall and despite an inept buyer's agent, it wasn't that big a deal. I truly resented that I had to do so much of our Realtor's work for her though. In retrospect, I should have worked with the listing agent instead.
The bank (Wells Fargo) paid our roofer to put a new roof on the house. Our contract was contingent upon inspections.
Our primary lender would not loan on a home with a roof with less than 3 years of roof life. Neither our primary or back-up lender would loan on a house with a roof leak, which this house had. A small one, but a roof leak nonetheless. Ours was not an FHA loan, either.
The house was far from trashed but did need some cosmetic work and a few updates. For the price we paid, it was well worth buying a foreclosure. The worst part of the process was our Realtor. Dumb and stubborn is a bad combination.
Also the home warranty we purchased has paid for itself 3 times over. Its the AHS flex plan which covers even mismatched systems and pre-existing conditions that can't be determined with a simple visual or mechanical test.
The HVAC compressor and defrost panel on our unit just died. AHS is paying to replace them. Cost to us? 60.00 for service call. Our Realtor had never heard of the warranty. We knew about it from having it for our last house. Did I mention that our buyer's agent was a dimwit? The bank paid a full 6 % commission too. ( 3 and 3)
Wells did want a delayed closing from the start (60 days ) because they were so swamped with foreclosures, but we declined and they managed to get their act together to close on our preferred date, with some pressure from us, the title company and the lender.
Since the moratorium on foreclosures has ended, does anyone know whether the banks prepared the paperwork for these foreclosures during that moratorium, and just needed to wait to push the paperwork through once the moratorium ended? Or did they use that time to catch up on all of their other work? I'm not sure when we can expect to see these foreclosures come on the market and was hopeful that one of you would have an inside track to this info.
I am glad to hear it worked out JG.
MJC, I have no idea. It will be interesting to see how much of a surge in foreclosure listings we see over the next few months.
My wife and I are in the process of offering on a foreclosure right now, will keep you all posted on how the experience is.
Cara,
Tanta was the best. Thanks for indulging my vent. :-)
Slowwealth,
Your story about a foreclosure purchase would be appreciated here.
I have an acquaintance whose problem has been beating other buyers to the contract with the bank. On their eighteenth try a few weeks ago, they bid 10% over asking and got the contract. This was in the Gainesville area on a townhouse.
JG,
That's great about the warranty. We have one of those too and hope something breaks in time. (Kidding, sort of!)
My personal call to Wells Fargo was slightly embarrassing but it worked. They conferenced their real estate agent in and boy was she surprised . . . I think the Post article neglected (among other things) to ask -- what were the agents doing for their clients in all of this?
Well its already done, they accepted our offer tonight after a little over 1 day turnaround...35k under asking and closing costs. Will keep you posted as to how the next step goes since i have heard horror stories about title/etc with foreclosures. Supposedly we have a ratified contract ready by monday so not out of the woods yet.
Congrats slowealth! Memorize the bank addendum when you get it and watch your dates closely. The banks
don't always care about missing their deadlines, but they do care if you miss yours.
Hope it all goes well for you!
Harriet, I usually think home warrantys are worthless, but I've been very pleased with the AHS flex plan. ( And no, I have no affiliation with the company) It's
paid for itself several times over on two houses for us. I think we'll probably renew it next year.
Well so far so good, got a ratified contract about 3-5 days late and the house had some problems on inspection but nothing huge. We are going to go ahead next step is finishing the financing paperwork then waiting for closing.
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