So…yeah. We were not looking to move, but a bigger house was listed on a beautiful street in a better school district, so we pounced and made an offer to close 6/15. We were told it was a pre-foreclosure, which is why we agreed to close so quickly and buy as-is. Offer accepted.
Within a week, we paid earnest money, paid for a home inspection, and prepared to sell our current home. Earlier last week, we heard that the bank’s lawyers were not replying to the seller’s lawyers and to halt any spending on our current home. A couple days later, the day of the sheriffs auction that we were unaware of, we were told that all was well and we could proceed!
Yesterday, we were told by the seller’s agent (who is also a friend of mine) that the house was sold at auction on Thursday. She said it’s not a done deal and the lawyers for the sellers and the bank will go before a judge and go from there. She also mentioned being able to buy it from the auction winners?
I don’t think the odds are in our favor- from what I’ve read online, the auction sale trumps the seller’s. I guess I’m just curious to know how this happens, how much the sellers and their realtor knew, and if there’s anything we can do at this point to secure the home.
Under contract on house/bank sold it at auction
byu/marigoldbutter inRealEstate
Posted by marigoldbutter
7 Comments
First of all, WE NEED TO KNOW YOUR LOCATION.
We also need to know what kind of auction was it? If someone is in foreclosure, you can still have a back tax auction that happens at the same time or before that.
I think your odds are extremely slim. Make sure the seller agrees to release your earnest money. Also the seller is likely in breach of contract because they were absolutely notified of this auction whatever type it was. They signed a contract stating they could convey clear title, and they could not. They owe you your inspection costs and you’d have a good small claims court case against them.
Sounds like the foreclosure was much more imminent than you thought! Had your agent looked into that beforehand?
Nothing you can do at his point.
This happens sometimes. Auction dates are often postponed, but not always, when the owner can show a legit purchase contract on the house to their lender. I used to do this as an agent negotiating short sales….it doesn’t always work out.
If I am understanding you correctly, the house has already sold at a Sheriff’s Sale. Was it a mortgage foreclosure or tax sale? In any event You will have to deal with whomever made the auction purchase. Everyone involved, unless REALLY incompetent, had to know what was going on, so I am a bit confused, especially if your Realtor is a friend.
Your friend is not a great realtor if it was sold at auction but you were under contract. No way would I use this friend on any future transactions.
This happened to me. The agent selling it for the bank had his friends buy it at auction. It was disheartening especially when we sent an email showing there was mold and they never responded.
Check with a real estate attorney on redemption laws in Illinois. If the owner has a redemption period, then there is potentially a window. If Illinois does not, then you’d be out of luck.