How Long Does It Take To Get Answer On A Foreclosure?

LoveInTheHouseMay 25, 2011

Another house I am very interested in buying is a foreclosure. I'm not necessarily trying to get a bargain. I love the house. I've heard it can take a long time for a bank to respond to your offer. I can't wait around for a long time because I have to move after my house closes. I would have made an offer months ago but I wasn't in contract yet and my agent said the bank wouldn't consider a house selling contingency. Therefore I waited till I got a solid deal. But now we're proceeding to closing in a month and a half and I have to find something. If I offer more money than this house is listed for, would that make them respond faster?

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Billl

"If I offer more money than this house is listed for, would that make them respond faster?"

It could if banks were rational, but it probably won't. The chance of you getting foreclosure sale approved in under 45 days is pretty darn slim. If you need to buy on a tight timeline, this probably isn't the route for you.

    Bookmark   May 25, 2011 at 12:41PM
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revamp

Time to respond varies from bank to bank and region to region. I was working to purchase an REO last year and after more than 4 weeks of going back and forth, we had a "verbal acceptance" but no signed contract. It was aggravating. Ultimately while waiting for the bank to get their act together we found a house that better suited our needs so we withdrew our offer on the REO and bought the other house.

That REO is still on the market to this day.

My advice? Submit your offer but keep looking at other properties. Have your Realtor draw up the offer such that after 48 hours or what have you that you can withdraw it at any time.

I don't think offering more money will make the gears move any faster. There is only one speed-- red-tape slow, and all offers churn through the same process. Case in point, I submitted a cash offer on a short sale property that I happened to know was $5k above another offer that was submitted the same day which included finance contingencies. The lower, poorer quality contract won the bid because "that was the offer that the bank came across first on the desk".

Good luck!

    Bookmark   May 25, 2011 at 12:41PM
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maddielee

We put a bid in on a foreclosure last August. Our offer was accepted within a few days. (Florida)

THEN the robo signing by Title Companies came into the picture and delayed the closing. Finally closed the first week of January.

    Bookmark   May 25, 2011 at 12:52PM
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deee_gw

It depends on the bank/mortgage company. If your dealing with a PO Box in California or a random email in Texas, it may never happen. We put an offer on a house in October (to a random email in Texas) and waited three months before throwing in the towel. It went into foreclosure, had another offer (much higher than ours). There are title issues and it still hasn't sold.

On the other hand, there have been quite a few foreclosures in our area that closed smoothly. They were mostly with local banks where there was a good contact person.

    Bookmark   May 25, 2011 at 1:03PM
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Carol_from_ny

It can take months depending on who you are dealing with and what their agenda is.
We dealt with a local bank, had a cash offer and a real estate lawyer representing us and even with that it took 6 months.
That was almost two years ago before things got more complicated.

    Bookmark   May 25, 2011 at 2:03PM
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brickeyee

"Have your Realtor draw up the offer such that after 48 hours or what have you that you can withdraw it at any time."

Almost every offer can be withdrawn until it is accepted.

The problem is they can 'accept' the offer, and then spend months screwing around with paper work.

What you need is a closing deadline that voids the offer.

If the property is now REO by the lender, it can still take a lot of time since in many cases the lender selling is NOT the actual owner of the note but their agent.

An offer that prevents ANY loss to the lender (all the foreclosure expenses, back interest, etc.) should get their attention, but many of the lenders are overloaded and simply cannot move quickly, and the whole foreclosure process has racked up additional expenses that can make the house a lot less of a bargain at any reasonable price.

I use attorneys to deal with the hanks for REO.
The banks seem to at least return their calls with some regularity.

You might consider renting, it is rarely a short process.
If the bank is losing ANY money they wil move even slower.

No one wants to sign off on the transaction, so everything is done by committee.
'Diffusion of responsibility' is the preferred process.

    Bookmark   May 25, 2011 at 4:40PM
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LoveInTheHouse

Ew, I don't think I have the stomach for this. I'll get more info but think I'm going to have to rule it out. Thanks everyone.

    Bookmark   May 25, 2011 at 10:29PM
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brickeyee

"Ew, I don't think I have the stomach for this."

It is often a painfully slow process.

It was never very fast, especially when the bank is looking at a loss.
The large (compared to previous) number of foreclosures is only slowing things further.

If you have patience you CAN get some good deals, but you need to view it as a business transaction (everyone else involved already is).

    Bookmark   May 26, 2011 at 10:20AM
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terriks

I work in a RE office, and I haven't noticed the REO sales taking that long to close. I wouldn't be scared off of a house that I loved based on comments on a forum. Talk to a local RE agent who is experienced in REO sales.

    Bookmark   May 26, 2011 at 12:28PM
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brickeyee

"I work in a RE office, and I haven't noticed the REO sales taking that long to close. "

It all depends on how well the bank is operating, how many foreclosures they are handling, and who actually owns the note.

It took me almost 4 months to close ona single house last fall.

Banks HATE losing money, and this alone seems to drag things out.

    Bookmark   May 26, 2011 at 4:02PM
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LoveInTheHouse

Terriks, I do love the house and like I said, it's not necessarily because I'm trying to get a bargain. But my agent also said that foreclosures take a long time. I actually didn't believe her and so that's why I asked on here! I have a few months if I need it--I can wait for a long closing but I can't wait long for an answer because I'm buying out of state--I can't keep going back and forth up there to look at properties.

    Bookmark   May 26, 2011 at 10:57PM
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barbcollins

When we bought our foreclosure investment house we got our answer the next day and closed in 2 weeks. But...

1. It was a cash purchase.
2. They kept it on the market for other offers. Sometimes they will raise the listing price hoping to get a better offer.
3. It was December, so we were all motivated to close before the end of the year.

    Bookmark   May 27, 2011 at 6:40AM
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linda117117

I think there might be some confusion with the posters about foreclosures and short sales. Typically you get an answer from the bank within a few days about a foreclosure property. Once a home is foreclosed, the bank wants it closed quickly. Short sales can take months and months without an answer.

    Bookmark   May 27, 2011 at 8:56AM
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brickeyee

"I think there might be some confusion with the posters about foreclosures and short sales. "

My experience is that REO that the bank is taking a hit on takes a while to close (often made worse by the fact the bank may only be an agent for the actual owner of the note that now owns the house).

    Bookmark   May 27, 2011 at 9:48AM
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LoveInTheHouse

Someone else just told me that too Linda. Well, it probably doesn't matter any more anyway because I just found out that house I was interested in is under contract.

    Bookmark   May 27, 2011 at 11:00PM
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ncrealestateguy

Herte in NC...

Foreclosed properties take 1-3 days for a verbal acceptance of an offer.

Short sales take anywhere from 1-3 months, or may never get a response.

    Bookmark   May 28, 2011 at 7:55AM
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brickeyee

"Foreclosed properties take 1-3 days for a verbal acceptance of an offer. "

Except verbal offers and acceptance mean NOTHING in RE transactions.

    Bookmark   May 28, 2011 at 10:18AM
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ncrealestateguy

I have never had a bank go back on thier verbal agreement. Nor do I know of an agent that that has happened to. There has to be a verbal agreement for the time after an agreement has been reached, until the time the bank has signed all of the forms that the buyer has already signed.
(Usually takes anywhere from 1 -5 days to get the signed contract back)

    Bookmark   May 29, 2011 at 7:41AM
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revamp

In my REO experience, I had a verbal acceptance of my offer after maybe 5 days, but 4 weeks after that still did not have written acceptance / contract.

    Bookmark   May 29, 2011 at 9:14AM
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brickeyee

Verbal contracts in RE are almost always specifically banned under the Stature of Frauds.

While they may make you feel nice, and they may even be honored, they have no legal merit and are not enforceable.

Until the contract is signed by all involved parties there is nothing legally enforceable.

    Bookmark   May 29, 2011 at 9:33AM
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ncrealestateguy

Brickeye,
No one here is arguing that verbal contracts are not enforceable. But there has to be an amount of time that the contract is verbal. The time between when the buyer signs all of the addendums, and when the forms are then signed by the lender.

    Bookmark   May 30, 2011 at 7:44AM
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brickeyee

"But there has to be an amount of time that the contract is verbal. The time between when the buyer signs all of the addendums, and when the forms are then signed by the lender."

No, there is simply NO CONTRACT yet.

The contract is formed ONLY when all the parties have singed all the agreements.

Until then, either party can decide to withdraw the offer, or simply refuse to sign.

At this point NO contract6 exists.

    Bookmark   May 30, 2011 at 10:24AM
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linda117117

Brickeye, why do you always seem to try to stir the pot? He simply said, "verbal offers are usually accepted within 1-3 days". Thats it. Question asked, question answered. You're getting into an entirely different conversation that no one even asked about.

    Bookmark   May 30, 2011 at 11:59PM
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ncrealestateguy

Thanks Linda...
Everyone knows what I meant.

    Bookmark   May 31, 2011 at 7:32AM
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brickeyee

"Brickeye, why do you always seem to try to stir the pot? He simply said, "verbal offers are usually accepted within 1-3 days". Thats it. Question asked, question answered. You're getting into an entirely different conversation that no one even asked about."

Because verbal offers are not contracts, and either party can walk away right up until the paper is signed and an actual legal contract created.

That a person may say they accept the offer verbally does NOT mean anything.

Do you really think if another offer that is twice as good came along they would continue?

What ANYONE SAYS about an offer or its acceptance means NOTHING.

    Bookmark   May 31, 2011 at 3:46PM
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linda117117

That a person may say they accept the offer verbally does NOT mean anything.

The question was "how long does it take to get an answer on a foreclosure"

Thats it! No one asked anything else about contracts or written or verbal offers.

But just for the record, I HAVE NEVER EVER had a bank accept a verbal offer then take a second offer because it was better. Most banks and savvy sellers know that a buyer will say anything they can to "get the deal". For this reason, the bank will hold thru on their "VERBAL acceptance" until contracts are signed. In my part of NY Verbal offers are all we have for at least 2 weeks on EVERY OFFER.

    Bookmark   May 31, 2011 at 5:38PM
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brickeyee

"The question was "how long does it take to get an answer on a foreclosure" "

The answer in this case would be an accepted and signed contract, not some verbal drivel that the offer is "accepted."

I have seen banks renege on plenty of things that 'looked good' or had not been signed off on yet but verbally 'accepted.'

I have had lenders fail to show at settlement with funds, fail to transfer funds despite everything being 'approved,' and otherwise make a mess of things (let alone getting dates wrong).

They are in business to make as much money as they can, especially when they are already taking a hit.

If they offered a verbal acceptance and a better offer was then made the shareholders would have every right to scream long and loud.

You may think the bankers are as honest as the day is long, but many are not, and they are all out for one thing, to make as much money as they can.

    Bookmark   June 2, 2011 at 4:14PM
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terriks

Actually, I believe that most standard RE contracts have an "as is" clause in them.

    Bookmark   June 3, 2011 at 12:45PM
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