How can they put a house up for Auction when we have a signed contract with the seller?

Question

We are still waiting on the bank in a "Short Sale". HAHA Short Sale should be Longggg Sale as we have waited 1 1/2 months so far. Now there is a notice on front door that an Auction is scheduled for July 23. Does that mean they are not acknowledging our signed contract and offer?

Answer 1

Could be. . . .they don't have to agree to a short sale

Why don't you AND the realtor contact them?  Don't sit waiting!

You're asking them to give up part of what you owe them, give up their secured interest in home

Could be they are keeping their options open, but time is short now

Answer 2

This is the problem the bank has no idea if the sales will go threw, then the bank may weigh the sales priced versus what they would get from the insurance payout if they foreclosed it maybe better for the bank to foreclose then take your short sale price

this all adds up to the bank proceeding with the foreclosure, in general it takes six month to foreclose, if you bring a buyer of a short sale within the last month or so the chances the bank will foreclose before the short sale offer is approved,

also on the short sale, there is no guarantee the bank is going to take the short sale offer, most counter with a higher offer

Hence yes its a very high probably you will run out of time and the place will be foreclosed upon

Answer 3

Yes, the bank can do this.  The bank was the final authority and didn’t agree to your offer price so you were not under contract to buy this house.

Answer 4

That is exactly what it means.  The seller said yes but the bank said no.  Without the banks signature you don't have a contract.  If you still want the house bid on it at the auction.

Answer 5

Did the bank approve the ratified contract? In a short-sale it requires a 3RD party approval.  If the bank hasn't approved the ratified contract between the seller and the buyer then it's not fully executed, therefore, the bank can do what they want.

Answer 6

You do not have a signed offer, the bank has not signed it yet.

The foreclosure marches on.

You need to set a fire under your agent and have them push to get your offer signed by the 22nd, otherwise it will be null and void.

HOWEVER, I would wait until the foreclosure, you will get the house cheaper.   I would bet on it.

The short sale and the foreclosure are literally handled by different departments at the bank, and the REO department is the one you want to work with.

Answer 7

Yup, that is exactly what it means.

They don't have to accept your offer or even respond to it.

Get your Realtor to withdraw it so you are free to pursue other transactions.

PS:  Call the bank and make sure your Realtor submitted it----at all.

PSS:  Short sales DO NOT require "third party approval"....that is not a legally correct term.  The bank has a lien on the property until you pay off that lien...that isn't a "third party" that is a direct party to the transaction.