Any way to place offer on short sale that will be auctioned?

8 Replies

So I checked out a house last week that I was ready to put an offer on but discovered today that it was pulled off the market yesterday and the bank has decided to auction it off.  Given the fairly short time period that it's been pulled off the market, is there any way that I can still try to place an offer and/or talk to the bank about buying it prior to it being auctioned?

I'm hoping for a creative solution here.  Unfortunately, I don't know which bank it is so that will be an obstacle as well and I'm not sure that the listing agent will share that with my agent as she hasn't been very forthcoming with info so far.  Any suggestions?

You knowing the bank isn't important, only the communications/progress this far by the listing agent/negotiator with the bank. most banks will delay an auction with a Solid offer that approaches their determined value. By Solid offer, I mean a real POF for a cash sale, or possibly a preapproved financed offer, with some buyer financial information as back up, not just a typical preapproval letter, inspections up front, etc. Here it also requires some actual communications/progress status from the bank on writings, which can be presented to the judge, since our foreclosures are judicial and judge must approve a sale delay.

Just go to the auction ...

Originally posted by @Wayne Brooks :

You knowing the bank isn't important, only the communications/progress this far by the listing agent/negotiator with the bank. most banks will delay an auction with a Solid offer that approaches their determined value. By Solid offer, I mean a real POF for a cash sale, or possibly a preapproved financed offer, with some buyer financial information as back up, not just a typical preapproval letter, inspections up front, etc. Here it also requires some actual communications/progress status from the bank on writings, which can be presented to the judge, since our foreclosures are judicial and judge must approve a sale delay.

 That makes sense, appreciate the info Wayne. Looks like I'm stuck at this point since the agent has been far from helpful.

Originally posted by @Steve Babiak :

Just go to the auction ...

 In case it wasn't clear, I was trying to avoid getting into a bidding war with a bunch of other people over a good house in a great area. I was hoping to solve this behind closed doors.

You said the listing agent is far from helpful; that is probably because the seller is not cooperative - in a short sale, the seller has to produce lots if documents in order to gain the lender!s approval, and often seller's just don't care to do all that is demanded to get the shirt sale approved. Leading the lender to proceed to auction ...

Originally posted by @Steve Babiak :

You said the listing agent is far from helpful; that is probably because the seller is not cooperative - in a short sale, the seller has to produce lots if documents in order to gain the lender!s approval, and often seller's just don't care to do all that is demanded to get the shirt sale approved. Leading the lender to proceed to auction ...

 You raise some great points. I need to research more into the short sale process and how it all happens since I was under the impression that I could reach out to the bank and creatively work my way in to submit an offer with some back door politics. Appreciate your response.

Good advice from both @Steve Babiak  and @Wayne Brooks  

The only thing I would add is you can get a good idea of what the pay-off on the property is from the original trust deed(s) on the abstract.  From there you will have a sense of why the short sale isn't getting done (uncooperative second, listed at too big a discount, etc)

Add to that legal fees and you will have your opening auction bid.  The only times auctions are interesting is if the property hasn't been listed or if there's a second that will go away.

If nobody buys it at the sale it will be listed in a few months as an REO. It is this stage where we are seeing our biggest discounts.

Wm

The method for getting the opening bid by the bank that @William Hochstedler just posted is a logical way to get that bid; unfortunately, from having attended many foreclosure auctions, I can say that this method is not always used to set the bank's bid. I have seen the opening bid way higher (due to fees for stuff like forced placed insurance, property taxes over years of missed payments, HOA dues, interest owed, property preservation costs, etc.); I have seen the opening bid be less than 1/3 of the debt owed in the judgment. So don't be surprised if the bid makes no sense ...

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