As a Chicago area real estate attorney I am often asked questions regarding foreclosures and short sales. I have been approached by both buyers and sellers who are often perplexed by the process. My background in real estate extends over 20 years. I have represented banks foreclosing on homes, I have represented purchasers buying foreclosures and short sales, and I have worked for a title company and am currently a title agent. My years of experience in this area, and having seen it from all sides, gives me a vantage that most attorneys who only do real estate closings do not possess.
How long does it take to a buy a foreclosure or short sale?
The question I receive most often from people wanting to purchase a home in foreclosure or a short sale is “Why does the process take so long?” They have attended a real estate seminar and were told that all they needed to do was approach the bank or the homeowner and express interest and cannot understand why the bank doesn’t immediately accept their offer. The thing to remember is that the bank does not own the property while it is in foreclosure and many owners in foreclosure are holding out hope that they can work out a deal.
When Should I Make an Offer on a Home in Foreclosure?
Once the foreclosure winds its way through the courts in Illinois it results in a Judgment of Foreclosure and Sale and a sale date is set. The owner has a right to redeem the property through the sale date. If the property is not redeemed a public sale of the property is held. Foreclosure sales are cash only, with 10 -20% due on the date of the sale and the balance within 24 hours. Should you buy at a foreclosure sale? Not unless you are an experienced buyer. Why? Because the lender whose debt you are buying may not be the only lien on the title. You are buying the property subject to every other lien but the first loan on the property. Buyers who have not done their research are shocked to learn that they purchased a property with judgments, second mortgages, and even tax liens. If no one bids on the property the lender becomes the owner following confirmation and all junior liens are extinguished. If you are interested in purchasing a home you know to be in foreclosure you should contact Chicago area real estate attorney Rhonda Stuart to help you navigate the process so that your time is not wasted.
What Happens When I Try to Purchase a Property via Short Sale
A short sale is when a buyer offers a property owner less than the total of all liens on a property. The pros of a short sale are that a buyer can get a home for less than its value. The cons are that the lender has to approve the short sale. Therefore, if there is more than one lender or other lienholder, they all must agree to the short sale. Some attorneys will tell you that you cannot purchase a short sale if there is more than one lien on the property. This is simply not true. I have experience negotiating settlement of debts with junior lien holders so that clean title can be transferred.
How to Get Started Purchasing a Short Sale or Foreclosure
If you want to buy a property via short sale and are getting the run around, contact Chicago area real estate attorney Rhonda Stuart. I can get to the bottom of your problem and tell you whether the deal is worth pursuing or whether it’s time to walk away.