I need advice quickly! After a couple of rounds of negotiations, I have submitted a short sale offer on a house for $55,000. I got a verbal acceptance. After faxing the offer last night, which was signed by the buyer and the seller, I checked the attorney’s foreclosure listing site. I saw that the opening bid on this property is $37,100! Since it hasn’t been accepted yet, should I fax a withdrawal of the offer? I thought I could withdraw the offer and then buy it on the courthouse steps for $37,100. I don’t want to tell the lender that I know about the opening bid of $37,100 because I’m afraid that they’ll change it to $55,000. The downside is that I’ll have to actually buy the house before selling it to another investor, versus assigning the contract or doing a simultaneous close. What do you advise that I do?
The starting bid is not a secret, in fact, it’s public information. The starting bid is set by the courts, not the banks. It is generally starts at or around a low percentage of the tax value of the property. But this can vary from state to state, even county to county.
Also, just because it starts at a number it does not mean that number is what it sells for. The banks will almost always bid the property up to a specific number. IF nobody else bids on the property then they take it at the opening bid. If someone else is there to bid on the property, they will bid it up to their ‘magic’ number.
If you have a short sale offer submitted, you can request fromt he LMR to postpone the auction. I teach people to get a letter from them stating that the property will be removed from the auction in order to allow time for our offer to be properly reviewed and accepted. Wording of this nature is what we want. With this letter we can then go to the court auction and make sure the property is pulled. This letter given to one of the clerks and they will pull the property from the days auctions if the bank failed to do so.
Don’t accept a verbal acceptance, you need it on paper to show others, like the auction clerks.
GooD LucK! :beer
Thanks for the advice. As of 3:15pm this afternoon, the property was removed from the foreclosure attorney’s website. I am awaiting a call from the lender to confirm whether they have accepted my offer or are just getting more time to consider my offer. I’ll push to get the letter from them that I can confirm that the property is no longer up for auction.