Home steps, whats their problem???

Question

I put a Freddie Mac/ Homesteps house under contract on Feb 4th, listed at 24,900 and after very slow negotiations I got a contract for just under 22K. before closing time came they canceled the contract, saying I was late, I had to  start over. To speed things up I offered the asking price. I was supposed to close March 28th, now the new deadline is tomorrow April 11. I haven't heard a thing yet. I plan to walk if not done tomorrow, has anyone else had slowness problems with Home Steps?

J Scott · Answer

What do you mean that you "were late?"

Late with what?

In general, REO purchases can move very slowly.  Banks are notorious for not having their act together, not getting docs prepared and signed quickly, not getting to the closing table as scheduled, etc.  But, they'll still hold you to the standard of getting everything done quickly.

Yup, it's a double standard, but that's the price buyers pay to get REO properties at a big discount (hopefully).

Btw, you should verify that you have the option to "walk away" and get your earnest money back.  It's quite possible the addendum you signed won't give you the right to walk away and get your deposit back just because the bank is being slow.

J Scott · Answer

You still haven't clarified what deadline was missed?  Did they miss the closing date?  They they disclose the issue and how long it will take to resolve?

You put the property under contract because it was a good deal...if it's still a good deal, why wouldn't you wait it out?

While I'm familiar with the standard FNMA REO addendum, I've never seen the addendum specific to Homesteps buyers, so I can't comment on your rights/responsibilities/risks of the contract...this is a better question for your attorney...

Dick M. · Answer

Well, another deadline come and gone, I called the listing Realtor twice today, he said he was working on it. I can't see in the addendum that I can't walk, and a paragraph says either party is limited to $1K loss if the other fails to proceed to settlement. Why don't I deserve it now??