Foreclosure notice threatens short sale

DEAR BENNY: A couple of months ago, we put our house on the market with a real estate agent as a short sale. We have received several offers and are just waiting on the bank's approval. Two weeks ago we received foreclosure papers from the lender's attorney. We vacated the home two months ago knowing we could not afford to keep it. We have kept the home and lawn up meticulously. Now that we have received foreclosure papers, what are our responsibilities as far as the home, lawn, utilities being left on, etc.? Your help would be greatly appreciated. --Kimberly

DEAR KIMBERLY: Why banks want to foreclose and risk ending up owning the property (because no one may buy at the foreclosure-auction sale) is beyond me. You and your real estate agent should advise the bank's attorney that a short sale is pending and that it makes no sense to pursue the foreclosure. A short sale makes sense for you and the bank. Your credit rating will not be affected as much with a short sale, and the bank (although it will lose money) will not potentially be stuck with your house.

To answer your question, I have to be cynical. Since the bank -- while presumably considering the short sale -- instituted foreclosure proceedings, I am not sympathetic with them at all. Accordingly, my initial impulse was to tell you not to spend any more money on the house and let it just sit there. However, since the short sale is still a possibility, I suspect that your buyer will balk if the house is not in the same condition as of the date the contract was signed.

Thus, you really have to find out if the short sale will be approved. If so, then continue to take care of the house. If not, then just walk away and let the bank take over.

DEAR BENNY: My elderly parents, who moved to California a year ago to be closer to their oldest two kids, are trying to sell their home of 54 years in New York. We have engaged an agent but do not know if she's doing a good job.

There have been a few open-house days, but here's what troubles me: The house was left a wreck. We knew it and she knew it. She said it was deadly to show in that condition. I agreed and asked her if she knew anyone who could come in to clean it up (for which we would pay, of course). Her response was that it needed more than tidying, and to get top dollar it needed tens, if not hundreds, of thousands of dollars of work.

While I'm sure the house needs work, wouldn't just a scrub help, and isn't it odd that she could not find someone to do that for us?

The real question is this: How do I know if an agent is good, and/or how do I find a good agent at all when I'm 3,000 miles away? --Jeanie

DEAR JEANIE: You are really asking two questions. First, what work will be required so that the house can be sold at a good price? I know you are far away, but it would make sense for you (or at least a good friend or relative) to inspect the house and have a couple of other real estate agents give you their take as to what really is needed. Candidly, unless you just want to sell it at a "fire sale" price to anyone who makes you a halfway decent offer, I don't believe that just a "scrub" will do the trick. ...CONTINUED

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