Patience is a Virtue

Slow-Road-Sign-378px

If you’re looking for a way to exercise your skills, or lack of them, in the area of patience you need go no further than attempting to purchase an REO (foreclosure). There’s plenty of things in life less frustrating…like waiting in line at Starbucks or the security screening thing at the airport, or going to the DMV to renew your drivers license. Think those are fun? Wait until you buy a foreclosure, or worse yet, a Short Sale!

Just for the purpose of brevity, we’ll only discuss the REO process here today. Mostly because I think I’ll need medication to discuss the short sale process! A home gets listed as “bank owned”. It’s looking good at a discount price and even though it needs work of some kind, it’s going to get offers. The listing agent sets an offer date which is published in the MLS and encourages you to meet that deadline and requires you to be approved by one of their reps as a condition of offer presentation. Sometimes the bank offers you some kind of rudimentary disclosures, maybe their rules for REO sales, maybe some HOA docs if it’s a condo/townhouse…or maybe they give you nothing at all.

A fairly new trend is for the listing agent to state openly that phone conversations are not OK. Any and all questions or communication needs to be done via their assistant and only by e-mail. Sounds friendly, huh? So, you present the offer…and you wait. After 2 or 3 days the lender comes back with a boilerplateish kind of document that essentially asks you to raise your offered price. Technically, it’s their request for you to come back to them with your “highest and best” offer since they are now letting you know officially and in writing that they have multiple offers. They’re also letting you know that they reserve the right to continue to look at offers even though your now way past their published deadline for offer presentation.

OK, you sign this document, and maybe you sweeten the pot for the lender too. At this point do you know what happens? You wait some more. The bank also is OK with collecting more offers if they can, possibly rendering your “highest and best” irrelevant again (who knows?).  After a week of stage two waiting, you hear (if your lucky)that you’re the winner. At this point you’re sent a 14 page addendum telling you, among other things, that the bank is still OK marketing this place and booting you out of first position at their discretion. They also want you to sign a clause that has you agree to pay them a fine of up to $350.00 a day if you are late closing the escrow. If you agree to all of that you probably will get the home. Maybe.

Doesn’t it sound fun? Then you get to inspect the property and find out all the details that the bank has so far not provided you.  Like I said, buy an REO or hang out at the DMV? Hmmm….

Comments

  1. Just bought a short sale townhouse. That was fun. It was like a good fiction story – cannot guess the end till read the last page.

Speak Your Mind

*