I've been very actively listing and selling REO properties for nearly 10 years now and this week I experienced a new "first" for me:
I have a bank-owned listing in a nearby town that I've had for approximately 3 months. Last week we got an accepted purchase contract on the property. The offer was a cash offer from a buyer who cashed in multiple retirement policies to buy this house. The bank was adamant about closing quickly so we are scheduled to close on March 1, 2011 (4 days from today). The buyers gave notice to end their current lease by mid March and have received some of their retirement money already.
It seemed like all was going well... that is, until I got an email from my Asset Manager on Wednesday (6 days before closing) stating that the listing had to be removed from inventory and I had to immediately expire the listing in the MLS and get a release from the buyers. The reason given was that the property had to be "re-foreclosed" on due to issues that they [the bank] "could not ensure through".
Obviously the buyers are ticked, the buyer's agent is ticked, I'm ticked (I've been paying bills on this property for three months with no reimbursement yet, not to mention driving the 48-mile round trip to the property every 10 days or so to check on or show the property), and now the buyers have to scramble to find temporary housing and move in two weeks.
Because this was a new concept for me, I called the Sheriff's Dept in the county where the Sheriff Sale was done - they had never heard of anything and all of their documentation now showed that the property had been titled and transferred to the bank and was now a "closed file". I talked to a handful of other REO agents in my area - none of them had ever heard of a property having to be re-foreclosed on after the title was transferred. And when the buyer's attorney searched the court records yesterday regarding the original foreclosure he found no defects in title or any other problems of any sort.
When I finally spoke to someone at the bank today they said this happens all the time and it's very unfortunate for everybody. [you think!?]
So now I have an expired listing that is no longer even classified as an REO according the bank, which means if I continue to pay the bills I will, in all likelihood, NOT get reimbursed after today. So I have to turn off heat (in Northern Ohio!!!!) in the middle of winter on a home that is basically move-in ready. [should I mention there is currently 8" of snow on the ground?]
What a shame - for all of us!
I've had listings pulled before two or three times for reasons such as "the bank sold it themselves in a bulk-package deal" or because it was being transferred to another Asset Mgt. company who already had their own agent in my area... but this is a new one in my area. And the worst part is there is no recourse for anyone... not the buyers, not their agent, not me. All we can do is hope this re-foreclosure happens quickly and I can relist and sell again to the buyers before too much winter damage occurs to the house.
So for those of you out there wanting to get into the REO business - be ready for some hard work and the potential of no compensation in the end.