You might have succeeded in buying a foreclosed home, you’ll need to get the bank’s attention to get tot he closing table.
Q: I am buying a foreclosed home from a bank in Georgia. I am paying cash for the home. We have been under contract for a month now. The closing date has been extended four times.
The first extension was due to our waiting for the bank to sign the contract even though we gave them a full price offer. The second and third extensions had to do with a problem they were having with the deed.
Every extension is costing me money. Can I ask the bank for a better price now that they’ve made me wait so long to close?
A: It’s hard enough trying to sell a home these days, let alone a foreclosure. But when you are a full price buyer you’d think that lenders would bend over backwards trying to get these deals done, given all of the foreclosure in their inventory.
But as you have come to see, the home buying process can not only be tedious but a big pain when dealing with lender real estate owned properties (REO).
In your situation, you should have agreed to either cancel the deal or agreed to build in a price reduction or other suitable compensation for the delay at the time you agreed to an extension of the contract.
In Georgia, home buyers typically don’t use real estate attorneys to assist with the purchase of a home. If you signed a boilerplate real estate purchase form, you may be bound by the terms of that real estate contract form.
Take a look at the contract you’re using. Does it allow you to terminate the deal if the seller fails to comply with the terms of the contract? If so, you may tell the REO lender that you’ve decided to buy a different property unless the price is reduced or you are somehow compensated for the delay. The problem with this strategy is that REO lenders do not seem to be rational sellers and the person working on the sale may not care whether the deal closes with you or not.
If you wind up finding out that the REO seller is unwilling to do anything for you, you’ll have to decide whether the price you are paying for the house from the REO seller is worth the wait. If it is not worth the wait, you should move on. Otherwise, if you are getting a great price for the home, then you’ll have to sit tight and suffer through what seems to be an interminable process.
Start with the terms listed in your contract and then consider whether you should sit down with a real estate attorney to go over the contract and strategize on how to proceed with the REO seller. Sometimes you need to review the real estate law issues with your attorney to figure out what steps you should take next.