“I don’t know what to do. We were supposed to close on a short sale this week, but I just found out the bank foreclosed on the home. We had a contract. How is this possible? I even called the sellers agent and they say they can’t help me. What should I do?”
Answer:
Many short sale homes are in foreclosure. If the home is in escrow, banks will often delay foreclosure to allow for the escrow to close. It helps if you get the bank the short sale documents more than 3 weeks before the scheduled foreclosure sale.
In your case, it sounds like either the bank wouldn’t delay the foreclosure at all, or perhaps they’d already done so but weren’t willing to do it again.
(Option #1) If you really want the home, you or your agent can call the lender and see if they’ll complete the sale to you. It would take a lot of time and persistence to reach anyone that might help you. And at best you’ve got a 10% chance of this working.
(Option #2) An easier approach is for you or your agent to check the house weekly. Once vacant, the banks agent puts a window sign with their contract info. Tell that agent you want to be called when the bank prices the house and puts it on the market. It usually takes 2-12 weeks for the home to be cleaned up, (possibly) repaired, priced, and put on the market.
My best advice: Do option #2 and keep looking for another home. If you find another one you like, buy that one.
