Like everyone, I've been following the stories about short sales and foreclosures. I've probably been following these stories more closely than most because I'm a real estate agent. I've had one foreclosure sale and one short sale. Both took longer than a normal deal but they weren't horror stories. It was a pleasant surprise.
This week I've had really unpleasant experience with a short sale/foreclosure. Two of my clients, a very nice married couple named Bradley*, have been thrust into a really twisted situation due to a short sale/foreclosure.
They rent a unit in a condo building. The owner of the unit had been receiving lots of letters in the last several months. In April, one of these letters was addressed to the Resident. They opened the letter. Shockingly, it was notice that their unit was to go to auction May 19th. That's next week.
Meanwhile, the owners told them they were putting the unit on the market. These two events happened about the same time. The listing agent never gave them the "First Right of Refusal" (FRR) paper work. Anybody living in DC knows that tenants have very strong rights. Whenever an owner is selling a property and has tenants, the tenants have to be given the opportunity to buy the unit first. Thus the "First Right of Refusal" paper work.
She did say they could have a shot at making an offer. (But still no FRR paper work.) They were attempting to sell the unit as a short sale before it was auctioned for foreclosure.
The Bradley's decided to make an offer. They had spoken to the owner. The owner said they'd take an offer of 250K for a newish condo (completed in 2006) with parking. It's two blocks from the metro and it's about 660 square feet. That's an amazing deal!
The listing agent sent them a contract. The Bradley's decided they didn't want to work with her in a dual agency situation. (When one agent represents both the buyer and seller in a transaction.) They called me instead on the recommendation of a former client.
I met with the Bradley's and explained what to expect in a short sale situation. The next day we wrote and submitted an offer. The offer has been ratified by the seller. But in the case of short sale, the bank has final approval.
Basically, we're in limbo. We're waiting for an answer from the bank. The listing agent has indicated that our offer isn't good enough. The auction is next week. IF the auction does proceed and somebody buys the condo, they have to vacate immediately. Seriously.
They are besides themselves. They've lived in the condo for 2 years. They paid their rent on time. They're excellent tenants.
But in a foreclosure situation, they don't have many rights as tenants. It's really frustrating on many levels.
We do have a back up plan because I love a back up plan. There's another unit in the same building that they can rent. They can move into it next week, if needed.
But isn't this messed up on so many levels? What if they didn't have solid jobs? What if there wasn't another unit in the building? What if they didn't have the money for the security deposit?
Apparently, this scenario is playing itself out all over the US. I had read about it but I hadn't experienced it. Another real estate first..oh boy. I have numerous feelings about this situation. I'm sure you can imagine.
Crazy, isn't it?
UPDATE: 5pm, 5/12- I just received an email from the listing agent saying the bank has postponed the auction. WHEW.
*Names have been changed to protect the privacy of my clients.