House-Can't Close on Time

[Colleen27]

OP, I'm sorry to hear they aren't working with you. I tried to buy a foreclosure but no one from the bank had been to the house and they wouldn't admit to the 30K in repairs it needed. They wanted to sell it for fair market value. I wanted it to be at fair market value AFTER the repairs. After 2 months of being strung along I said forget it.

We've run into that too. There was one house we really would have liked, but they're asking what it would be worth in good condition. The problem is that it isn't in good condition. The roof is actively leaking, so the entire upstairs needs to be gutted because of extensive water damage to the drywall, carpet, and subflooring, all the insulation needs replaced, and of course it needs a roof. The house has been on the market for well over a year now, deteriorating a little more with each passing week, and has actually gone to auction 3 times and failed to meet the reserve price each and every time, but the bank isn't willing to take less than what they're asking.

I hate to see it - there are so many foreclosures in my community and so many of the banks are holding out for prices that they aren't going to get until the market makes a significant rebound (like housing values going up by about 50%) that I'm really starting to worry over what will happen to our safe little town now that there are long-term vacant, neglected homes all over the place.

 

[seashoreCM]

We've run into that too. There was one house we really would have liked, but they're asking what it would be worth

I hate to see it - there are so many foreclosures in my community and so many of the banks are holding out for prices that they aren't going to get until the market makes a significant rebound (like housing values going up by about 50%) that I'm really starting to worry over what will happen to our safe little town now that there are long-term vacant, neglected homes all over the place.

Meanwhile those houses deteriorate with each passing week while the pie in the sky bankers sit and twiddle their thumbs. So the net value of the house will never rise.

Why buy a foreclosure in the first place? To get a cheap cheap price of course.

 

[TheRustyScupper]

Have you found that most banks are willing to accept those terms? Most of the foreclosures we've looked at have specified that they won't accept a sales contract that includes a penalty clause, presumably because of how common these types of delays are. =

1) Yes, they do accept clauses.
2) Just make sure you present a pre-qualified mortgage certificate.
3) This shows you can go immediately, and want them to do so.

 

[Colleen27]

1) Yes, they do accept clauses.
2) Just make sure you present a pre-qualified mortgage certificate.
3) This shows you can go immediately, and want them to do so.

We go one step better than that - we are cash buyers at this point in our lives. If they had wanted to close the day after our offer was accepted, we'd have been ready to go! We still haven't found that banks are accepting of penalty clauses.

I wonder if this is somewhat regional? The bank we're dealing with now only uses one title company and one closing agency for all of Southeast Michigan, and with the foreclosure rate here, they're so swamped that delays are all but inevitable.

 

[Pakey]

We had same issues; trying to buy with cash and there was no budging on the penalty clauses or anything else. We have a very high foreclosure rate here but the "good deals" are in high demand. On the one we ended up with for our new rental home, there were 10 bids at above asking price on the first day it was listed. The bank (which was not local) wasn't negotiating one thing. If we were not happy with their conditions, they were just going to the next bidder on the list.

 

[Colleen27]

We had same issues; trying to buy with cash and there was no budging on the penalty clauses or anything else. We have a very high foreclosure rate here but the "good deals" are in high demand. On the one we ended up with for our new rental home, there were 10 bids at above asking price on the first day it was listed. The bank (which was not local) wasn't negotiating one thing. If we were not happy with their conditions, they were just going to the next bidder on the list.

I can at least understand in those circumstances. Here, even the steals aren't in much demand. There are no less than a half-dozen houses we were unable to reach a deal on that are still sitting on the market, some listed for as little as 10K.

The house we eventually did buy had been on the market 174 days when we made our offer, and they were happy at that point to take 5K under asking but still wouldn't budge on a penalty clause that would have forced a timely closing.

 

[carmie3377]

Sorry to hear about all your problems with the closing. Makes me glad we opted against buying a foreclosure 2 years ago when moving here. DH had a contracted start date for his job and it would not have been fun having to move twice.

 

[arminnie]

I've bought about 10 houses - and I've never had one that closed on time. (never bought a foreclosure either). The mortgage/title companies/banks always are late on something.

My last purchase was in 2005. I was driving to my closing when I got a call that it was going to be delayed!

I closed and then Katrina hit a few days later. I had no damage - but was so glad I closed before the storm as it would not have happened for months later if at all after the big K.