Results Realty Buzz: The foreclosure you are buying may not close on time!

Informing you on the Real Estate Market in Spring Texas and the surrounding areas and other interesting tid bits!

The foreclosure you are buying may not close on time!

There are a lot of foreclosures out there right now and there are some good deals.  If you are buying a foreclosure just keep in mind that you might need to be flexible; especially when it comes to Bank Foreclosuresgetting it closed.  I have had several buyers lately that have not closed on time.  When you are buying a foreclosure you are dealing with a bank; this is a lot different than when you are buying directly from a seller.  In this case you are dealing with bank bureaucracy.  Depending on how many foreclosures are getting closed at the time will depend on how fast your paperwork makes it through the system. The paperwork has to be approved and if there are a lot of foreclosures your paperwork can get buried in the mound. 

There can be other problems also; I recently had one that didn't close on time because of a typo that the attorney's office made on the title policy.  The bank won't let you close until everything is correct; even if it is their problem.  You just need to realize this going in to the process.  You probably want to have some flexibility on your move in date.  If you are moving in to the property yourself you might want to schedule the moving truck after you know it has closed. 

So long story short  even if you get your part done on time that doesn't necessariy mean that you will close on time.

Comment balloon 33 commentsMarchel Peterson • October 11 2007 10:21PM

Comments

Marchel - It is so irritating when you get everything finished on time, you get the Title Company coordinated, think everything is fine, and then wham!  Something happens that is completely out of your hands. 
Posted by Candy Henthorne, Spring Texas Real Estate (Results Realty) about 11 years ago

Marchel,

I have friends who bought a VA home and the Attorney found a huge lien.  Took ten months to close...

Good thing it was a fix/flip, and not their primary home plan.

Posted by Mike Jaquish, 919-880-2769 Cary, NC, Real Estate (Realty Arts) about 11 years ago
Candy, I could not agree more!  When it is a foreclosure so much is out of our hands.
Posted by Marchel Peterson, Spring TX Real Estate E-Pro (Results Realty) about 11 years ago
Mike, you had patient friends.  I have done two short sales, (should be called long sales) and in both of them I lost several buyers along the way.  I guess there is not the same amount of urgency when it is a flip; although I'm sure they were glad when it was done.  I hope they got a killer deal!
Posted by Marchel Peterson, Spring TX Real Estate E-Pro (Results Realty) about 11 years ago

Marchel,

I think it was profitable.  The scary thing is how the banks take away most of the protections in standard forms with their own paperwork.

They only had $500 EMD, so were prepared to lose it, if needed.

Posted by Mike Jaquish, 919-880-2769 Cary, NC, Real Estate (Realty Arts) about 11 years ago
And don't forget the banks' propensity for charging per diem "late closing fees."  Sometimes I think that they're more interested in getting EMDs forfeited and charging per diems than selling the properties.
Posted by Ted Lyons (www.nosurpriseloans.com) about 11 years ago
In our neck of the woods people are either buying homes that are already foreclosed (REO) or, if it's a short sale or in the foreclosure process, ones that the bank has already approved. Thanks, Marchel, for some solid advice for your peeps in TX.
Posted by Jolynne Photography, Creative Wedding Photography, Family Portraits, Bar Mitzvahs, Bat Mitzvahs, Senior Pictures, Event Photography (Jolynne Photography) about 11 years ago
Marchel...I'd say 75% + of the short sale, bank owned, foreclosures here do not close on time.  I've been telling buyers to be prepared to close up to a month later than the date agreed upon.  Banks make their own rules, and we have to play by their rules.
Posted by Mary Warren about 11 years ago
we call this the hurry up and wait game - you hurry up and get the offer in so they can approve it.... then you wait and wait and wait for them to get through all their departments - it is frustrating but if your client knows it ahead of time - it does help
Posted by Thesa Chambers, Principal Broker - Licensed in Oregon (Fred Real Estate Group) about 11 years ago
Marchel, this is excellent information.  Foreclosures are usually a great deal for a buyer, but not what the banks like to see.  Resistance seems to come from all directions.
Posted by Robert Monk, Florida Real Estate (100% Realty, Inc.) about 11 years ago
Marchel, if I have buyers that need to be in a home by a certain date, we don't look at foreclosures for the very reason you mentioned. You rarely can count on a bank to perform. That's why banks need to stay out of real estate.
Posted by Missy Caulk, Savvy Realtor - Ann Arbor Real Estate (Missy Caulk TEAM) about 11 years ago
Marchel,  I've been working with two buyers for the past few weeks both of whom do not want the hassle of dealing with foreclosures.  There are so many other homes on the market they don't feel it is necessary.  In our market, the utilities are off and the meters have been pulled - if you want to do an inspection you turn them on and off at your ecpense.  People don't like jumping through hoops, Karen
Posted by Karen Kruschka, - "My Experience Isn't Expensive - It's PRICELESS" (RE/MAX Executives) about 11 years ago
Missy - Good advice, it would be a shame for the moving truck to show up and no place to on load.  In my market  it is not uncomon for a closing not to happen on the expected date and I am talking about regular transactions.  In our contract it alway say on or about which could be weeks after the proposed closing.
Posted by Jennifer Fivelsdal, Mid Hudson Valley real estate connection ( JFIVE Home Realty LLC | 845-758-6842|162 Deer Run Rd Red Hook NY 12571) about 11 years ago

Ted, you are totally correct on the late fees, here if we don't close on time it is typically $100 a day that you go beyond your closing time.

Posted by Marchel Peterson, Spring TX Real Estate E-Pro (Results Realty) about 11 years ago

Joey, I have a young couple right now not closing on time because of the typo error, I had told them when they wanted to buy the foreclosure that could be the case but I still feel frustrated for them.  He is the new Worship Minister at our Church and they had help all lined up and then he is to leave for the men't retreat today.  Hopefully we will be able to close this morning.

Posted by Marchel Peterson, Spring TX Real Estate E-Pro (Results Realty) about 11 years ago

Mary, a whole month that must drive you CRAZY!

Thesa, you are right it is kind of like the Army, hurry up and wait.

Posted by Marchel Peterson, Spring TX Real Estate E-Pro (Results Realty) about 11 years ago
Marchel - I keep reading about the banks cooperating and yet, I don't see it happening in real life.
Posted by Paula Henry, Realtor - Indianapolis Real Estate - 317-605-4174 (Home to Indy Team @ HomeSmart Realty Group) about 11 years ago

Robert, "Resistance seems to come in all directions".  Too True!!!!

Missy, let's pray that NAR stays tough on keeping banks our of real estate.  They should do what they do well and it is not real estate.

Posted by Marchel Peterson, Spring TX Real Estate E-Pro (Results Realty) about 11 years ago

Karen, some of ours have the utilites on and some don't.  Some of them are great deals and others are not.  We have a wide range here. 

Jennifer, "on or about"  that stinks ours says "on or before" (except for the banks of course).

Posted by Marchel Peterson, Spring TX Real Estate E-Pro (Results Realty) about 11 years ago
Great outline Marchel, on the foreclosure process.  The truth is it does take a bit more patience and a knowledgeable professional to guide you through this type of transaction.  This market does offer some unique opportunities but having the knowledge and patience is also a requirement for success.  Nice post Marchel.
Posted by Gary White~Grand Rapids Home Selling Pro Call: 616-821-9375, Real Estate Services You can Trust! (Flexit Realty "Flexible Home Selling Solutions") about 11 years ago
Gary, you are right patience is something you need to have a lot of when dealing with foreclosures.  You are really at the mercy of the bank.  It is good to know that up front before even starting the process.  Thanks for your comment.
Posted by Marchel Peterson, Spring TX Real Estate E-Pro (Results Realty) about 11 years ago

Marchel,

This is great advice and one more thing for people to consider when looking at foreclosed properties.  Sometimes it just isn't worth all the hassle.

Posted by Rita Taylor, Sanford NC Real Estate - Homes for Sale in Sanford North Carolina (None) about 11 years ago

Yes indeed...dealing with all that bureaucratic red tape can be a pain and many times is a deal breaker!

Take care & good luck to you!

Posted by Armando Rodriguez, Orlando Homes 4 Sale, Real Estate Broker-GRI (QUEST REALTY SERVICES) about 11 years ago

Rita, you are right there are often better deals to be found without going the foreclosure route.  I have found  relo's in our area to have some of the best deals.

Posted by Marchel Peterson, Spring TX Real Estate E-Pro (Results Realty) about 11 years ago
Orlando, I could not agree more.  Dealing with a bank is about as bureaucratic as you can get also.  Thanks for stopping by.
Posted by Marchel Peterson, Spring TX Real Estate E-Pro (Results Realty) about 11 years ago
Well Marchel - you can say that again!  I'm going through this myself with my out of town seller.  We have been back and forth...ugh
Posted by Diane Rice, SFR, SRES, CNC ( Rice Prprty Mgmnt & Rlty, LLC, South Holland, IL) about 11 years ago
Diane, with a bank you are on their time not yours.  Yet if you are late closing they charge $100 a day.  Something just doesn't seem right with that scenario.
Posted by Marchel Peterson, Spring TX Real Estate E-Pro (Results Realty) about 11 years ago
no it doesn't!
Posted by Diane Rice, SFR, SRES, CNC ( Rice Prprty Mgmnt & Rlty, LLC, South Holland, IL) about 11 years ago
This is a good point and something most buyers would not know unless they where working with their own Realtor that would be good enough to tell them. Thanks for the tip!
Posted by Shellee Ashmore (The Inner Iris Photography) about 11 years ago
closing on time with a foreclosure is a must as most lenders impose daily fees for those who do not close in a timely manner.  I have seen fees in excess of $100.00 per day!
Posted by Jeffrey Dolfinger, NRBA Member (24/7 Realty Inc.) almost 11 years ago

Jeffrey, I have seen those fees also.  I have never had anyone have to pay them as it has always been either the bank, the banks attornies or their title comany that has caused the transaction to be late.  The funny thing is my client doesn't get paid for them making it late.

Posted by Marchel Peterson, Spring TX Real Estate E-Pro (Results Realty) almost 11 years ago

 Marchel,

You are so right on this one . I worked on foreclosures in the 80', 90's,  and now. Seems like Murphy's law overly applies to foreclosure property.  Also we actually have a couple of loans my family made within the last year on real estate.  Hope we never have to forclose on them.  If so, you may come and sell them and we won't delay a thing. ;-)

Trey

Posted by Trey Thurmond, College Station , Texas Homes (BCR Realtors) almost 11 years ago
Trey, since I wrote this post I a had another buyer buy a foreclosure.  It was supposed to close on Dec. 12th and we ended up closing on December 28th.  Nothing to do with my client; in this case it was the title company that the bank INSISTED on using.  Had they used the local title company (not the one down in Houston) I am sure we would have closed on time.  It is very frustrating but in this instance my client got a good deal.  I guess you can be a little more patient when you know you are getting a good deal.
Posted by Marchel Peterson, Spring TX Real Estate E-Pro (Results Realty) almost 11 years ago

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