If buying a house and moving isn’t stressful enough, how about adding the factor of having no idea for the timing for closing? Foreclosed properties can be a “good deal” but often they come with head-aches, some more obvious than others. A buyer can see clearly, the property needs carpet, paint, appliances, fixtures, yard care; all common with a bank owned property, but what isn’t always obvious is the process to get to the closing table. Banks are backlogged, the number of foreclosures are higher than ever, and recent state law changes made to expedite the process, has had an opposite effect.
Previously, when a foreclosed property was auctioned at a sheriff’s sale, the deed was prepared by the sheriff’s office and filed. Now, lawyers are required to prepare the deeds for transfers. So if there are problems with the deeds, the cases can bounce back and forth between the law firm and the sheriff’s office until corrected. Also, the volume is up, but the staff for this function has not been increased, nor overtime approved. The process that used to commonly take about two weeks, now commonly takes two months, and maybe longer.
Buyers potentially will face losing the rate they have locked if the timing goes beyond 30 days, not closing by December 1st, or worse being homeless if they don’t have a plan B for temporary housing.
Who is at fault? Should the banks be allowed to market foreclosed homes prior to being ready and able to sell? Should listing agents put these properties on the MLS? Should the sheriff beaf up the staff (who would pay for that?) Or, should buyers have to suffer the consequences because they didn’t do their homework, or have their own agent who did research for them?
Looks like a State of Ohio legislation with good intentions, gone bad.