That's correct. Two days before we were supposed to close, after we had given our lender every possible form of documentation imaginable (purchase & sales agreement? check. employment verification? check. receipt from last gallon of milk purchased? check. VIN# of your neighbor's first car? check.) and had gotten the greenlight, there was a sudden hitch.
The seller (a bank) never recorded the foreclosure deed. As in, they were 2 days away from selling a house that they didn't technically own.
On one hand, we were really disappointed. So we don't get our house yet? When will we get it? On the other hand...RELIEF! The closing is postponed and it's not our fault!
This is a particularly important point for us, as the house is being sold via a real estate auction site, RealtyBid.com. We weren't scared off by the unconventional venue, but there were some daunting conditions to the transaction:
1) You must close within 30 days of winning the auction.
2) When you sign and submit the purchase and sales agreement, you must also submit a 5% deposit. That's 5% of the purchase price.
3) If you fail to close in 30 days, your 5% deposit is kept by the seller.
However, if the seller cannot provide a clear title on the day of closing, the buyer is not held to the above conditions. And that's where we are now. The deal is still on, but we can breathe a little easier knowing that our 5% deposit is no longer at risk, and it's up to the seller to move this forward.
Phew!
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