Earlier this month, the Chicago Tribune ran a story about a woman who had been hoping to buy a short sale property in Michigan. According to the article, this woman’s personal story exposes some of the difficulties potential homebuyers encounter when they try to buy a short sale. Short sales are basically “pre-foreclosure” sales, or a final effort to sell a house before it officially goes into foreclosure. Over the past couple of years, short sales have been popular options for Americans looking to buy a home. But are they the best option?
In a previous blog post, we told you about some of the “short sale snafus” that people often encounter. Generally, one of the most frustrating issues about these sales are their uncertain time periods. But many potential homebuyers also encounter pricing problems between the seller and the lender, as well as lenders who push for foreclosure when the short sale isn’t going quickly. Experienced real estate attorneys can help to guide you through this confusing process. If you have questions about buying a short sale, contact the Emerson Law Firm today.
One Woman’s Short Sale Story
To get a better idea of some of the hang-ups associated with buying a home as a short sale, it might help to take a closer look at the story of the Michigan homeowner whose personal account appeared in the Chicago Tribune. The article explained that she made an offer on a property, but her offer “went nowhere,” and the house ended up in foreclosure. The woman moved her family into the house, but Freddie Mac told her that it “doesn’t allow tenants to purchase occupied homes.” She contacted her congressional representative, but it didn’t go anywhere. Next, she wrote to the Chicago Tribune.
According to the newspaper, the woman’s letter said, “I have great credit and have been preapproved for the purchase. And I will gladly accept the home as is without our government having to spend one more dime of your money or mine. It seems so simple. Can you help point me in the right direction?”
The newspaper quickly heard from a spokesperson for Freddie Mac, who agreed to track down this case. Only a few weeks later, the woman’s sale had gone through. Yet, the Chicago Tribune remained interested in piecing together the timeline of a foreclosure. What takes so long?
A Short Sale Timeline
It can take nearly a year (and sometimes even longer) for an offer on a short sale to be considered. Why is this the case? A big issue is communication between the buyer, the seller, the lender, and the servicer. According to the article, “the right people aren’t getting the right information in a timely manner.” And moreover, the poor communication between the parties involves leads to an “opaque process” that continues to “confound borrowers, buyers, sellers, lenders, and servicers alike.”
In this specific case, the owner of the property hadn’t been in contact with the lender and the investors, and no one could find him. As a result, the eager homebuyer couldn’t continue with the sale, and she and her family were left in the dark. In other words, if a seller can’t be reached, a property can’t be sold. Once the property was foreclosed on, Freddie Mac had a clear title on the property, which allowed the buyer to move forward with the home.
There is a lesson to be learned here. Short sales are especially complicated because they involve a lot of different parties, and they all have to communicate and negotiate with one another before the buyer can move forward on the short sale. Freddie Mac says that the key to buying a short sale is staying “in constant contact with the servicer.” In short, communication is essential.
If you’re considering a short sale, you’ll need an attorney on your side to handle the complications associated with these properties. Contact the experienced lawyers at the Emerson Law Firm today to discuss your case.
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