Can you bid on a Property that is under contract in a short sale?
I found the perfect dream home fixer upper in the town I grew up in. I called this morning and the Realtor told me it just went under contract yesterday, that the bank had not yet accepted their bid, but they were legally obligated not to market the home to me.
I would really like to purchase this house, do I have any options?
Ideas I had:
1. Offer the current buyer under contract a sum of money to transfer the contract to me? For example, make a quick $20k by letting me buy it and not you.
2. Contact the lender directly and offer a higher price. Its a short sale and the lender would have to approve of any sale I assume and its in their interest to get the most $$? How would I do this?
3. Convince the seller to break their contract with the buyer and sell to me?
I dont prefer option #4 which is to hope the deal falls through.
Thanks for any ideas!
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thanks fo the answer – that makes alot of sense. So really the only legal option here is to work with the buyers agent for them to buy the house and then to turn around and sell to me afterwards? That way they could get a $20k markup or something. I am hoping the other person is an investor and a free 20k cant be too bad?
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All interesting ideas.
The person that told you that legally they can’t look at your bid is probably wrong. He probably was trying to tell you that the bank has some policy that prevents it.
The bank is not the owner and has no right to sell the house- so #2 won’t work. You may could screw up the current sale and get involved in a lawsuit. Then the short sale would not work at all. The bank would have to add a huge amount of legal fees and foreclosure fees to the money invested in this home. No one would be happy with you and you may also be sued. Several months from now when the house would be on the market as a foreclosure the price may be quite a bit higher and the current owner would be badly hurt by your actions.
Most banks do not allow assignment of contracts in short sales. They are wanting more than anything to make sure no scams are going on and they want to control who the buyer is. So #1 would not work.
You would have to give the current owner a sum of cash to break their current contract. They would be required to report that to the bank and probably the bank would take that money away from them because of the short sale. So #3 would not work unless the seller did not report the money- and that may be bank fraud and that would mean jail time if they got caught.
A short sale is so frustrating for a buyer that almost half fall thru anyway. If it does fall thru and you become the buyer I bet you end up getting very upset by the process also.