Q: I decided to take a risk and make an offer on a short sale. The offer was accepted by the seller and the agent called me today to say he just learned the property was set to be foreclosed on next Tuesday.
He called the listing agent and she said she was pretty sure that the lender would pull it off the auction list as we have made a good offer.
I’m wondering if it would it be better for me to go ahead and withdraw my offer and then bid again once the property goes up for auction? We’re cash buyers, so we don’t have to worry about financing the purchase. Thank you.
A: I’m not sure you’d be better off waiting to purchase this property. You might wind up paying the same price, or more, or you might lose the property to another investor.
The real question is will the lender accept your offer with the property about to go into foreclosure. It’s great that the seller accepted your offer, but the seller doesn’t get to make the final decision. If the lender has already decided to foreclose, and that process is in motion, the lender might have already decided not to accept your offer and move on.
If you’re already rethinking the offer, and wondering if you made a good move, then maybe you’re not really ready to buy this property. But if you felt confident that the price you offered for the short sale was fair, you should move forward and see if the lender will accept it, and allow you to close on it quickly.
One advantage of a foreclosure over a short sale is that you might get good title to the home through a foreclosure and have all expenses that are owed by the seller paid off at the settlement or closing of the property. With a short sale, you may be assuming payment of some items.
Please research the method in which foreclosures work in your state and determine what risks you take when you buy a foreclosure over a short sale.