Short Sales Who Gets the Key or to Re-key??

By
Real Estate Agent with Long Realty West Valley Sun City Grand Surprise Arizona

Earlier this week I was showing a client short sale properties in Surprise listed on Arizona Multiple Listing Service.  At a specific property the key in the combination lockbox did not open the front door and there was a new deadbolt lock.  I called the listing agent to tell him that the home was obviously re-keyed.Who Gets to Re-Key?

According to the listing agent, banks are re-keying vacant short-sale properties to winterize them.  Evidently this is a procedure banks are doing in order to protect the property.  WithinProtecting Your Assets a few hours, the listing agent had the locks re-keyed a second time.

The trustee sale on this property is scheduled for February.  Although the judicial system has not given the bank the title to the property yet, does the bank have a right to exclude the homeowner from re-entering the property once it is vacated? 

Do homeowners relinquish their rights to access their home once it appears vacant and the mortgage is delinquent?   

Do agents have a right to change locks on a short sale property that has not yet been foreclosed upon? 

What do you leagal eagle agents think about the legality of these practices?

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Re-Blogged 2 times:

Re-Blogged By Re-Blogged At
  1. Shannon Coe 01/02/2011 09:33 PM
  2. Eva Erdmann 01/03/2011 11:06 AM
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Anonymous
Anonymous
Anonymous

I have only done one Short Sale as the Listing Agent and will never do another.  The time invested is not worth the ROI.

Banks act as if they can do what ever they want and treat us agents like trash.  I say they need US more then we need them.  If ALL agents would just stop working on Short Sales and Foreclousers all together, Banks wil get the hint and maybe start treating us with the respect we desearve.

January 03, 2011 09:20 PM #112
Anonymous
Anonymous
Sally Picciuto
Another problem with bank departments to have to desk with. Fortunately our weather in Southern California is usually moderate so "winterizing" is something we don't normally do.
January 04, 2011 12:16 AM #113
Rainmaker
89,007
Damon Botticelli
Silver State Realty & Investments - Las Vegas, NV
Realtor - Las Vegas Real Estate

There is no need for winterizing here in Las Vegas but I do see it on some reo's (which is kind of funny to see them waste $ on that, and do nothing about carpet that's covered with who knows what) .  I don't recall seeing winterizing done on any short sales here.  I have seen the banks re-key short sale, but not as much in the last year or so.  My understanding is that they do have legal right (here in Nevada) to secure the property if they believe it's been abandoned.  Either way, my lock box goes on the gas meter, never on the door!  Yeah, it is annoying when it happens, but not really a big deal.  Just have a locksmith come out and re-key it. 

January 04, 2011 01:22 AM #114
Rainer
33,646
Jennifer Marks
On Maternity Leave - Garner, NC

I saw this happen to a home owner here in NC. We had been working with the bank to get a Short Sale approved.  The bank's winterizing sub contractor stuck a huge sticker on the door with a date to vacate by. I called the Asset Manager and he said "did homeowner need more time" -- Vacating property was a term of there Short Sale Approval Process.  Make sure you know all the terms of the Short Sale.  With this particular bank--once they accepted her Short Sale the home owner is out, is given a small amount of moving money and the bank begins taking care of its asset -- including re-key, winterizing, trash out, & any repairs to keep the property safe.

 There is a difference between Vacant & Abandoned.  If the homeowner moves out when they are  behind on the mortgage with out notifing the bank in advance it may consider it abandoned -- not vacant.  

January 04, 2011 09:05 AM #115
Rainmaker
36,894
Denyse Naylor
Southern Homes of The Carolinas - Denver, NC
The Naylor Team - Search Denver NC Homes for Sale

Leolinda,

I just had the experience with Bank of America re-keying & winterizing my short sale listing. They were relatively cooperative in giving me the code to the new combo box that was installed by the winterization company. they also indicated that I was free to re-key myself & send them the bill. I just want to get he property sold so I'm leaving their combo lock instead of the supra key &ave the code to the showing service. B of A did call me again to say that they  would be sending me a new key....hasn't appeared as yet.

I can't wait to get an offer & then wade through the Equator mess!!!

January 04, 2011 11:06 AM #116
Rainmaker
1,239,469
Gene Riemenschneider
Home Point Real Estate - Brentwood, CA
Turning Houses into Homes

I had a bank that offered to do maitenance on a Short Sale and my sellers (who had already moved agreed) but they have never touched the property.

January 04, 2011 12:29 PM #117
Rainer
203,880
Eugene Adan
Adan Properties, Carlsbad, CA (760) 720-9710 - Carlsbad, CA
Carlsbad Real Estate

Leolinda,

On a short sale; NO!  It seems illegal to me.  They don't care and the listing agent should have been contacted at a minimum.

January 04, 2011 12:41 PM #118
Rainmaker
50,461
Lynn M. Bower
John R Wood Realtors - Naples, FL
PA, ABR, GRI, RSPS, AHWD, PMN, CNE

Leolinda,

Wow! You stirred a hornet's nest...I don't recall so many long answers to this situation in any post. But what a great way to learn (again) from The AR Nation. Great, great information !

January 04, 2011 01:09 PM #119
Rainmaker
168,743
Gayle Barton
BERKSHIRE HATHAWAY Georgia Properties - Cumming, GA
South Forsyth Real Estate - Cumming GA Homes

I had this happen on one of my listings earlier this year, but the company hired to "secure" the property actually damaged two VERY EXPENSIVE triple locking doors and repacled the locks with soemthing my 10 year could have picked.

They also placed a lock on each of the garagae doors but did not unplug the openers so they ended up being damaged as well.

All told, the company the bank used to "secure" the property caused about $5K in damages.  Thankfully, I was able to provide before and after photos for my out of state sellers.

January 04, 2011 02:39 PM #120
Rainmaker
134,415
Paul Francis
Prudential Americana Group - REALTORS - Las Vegas, NV
Las Vegas Real Estate - Summerlin Homes - 702.592.

Wow... comment #70 is well worth the read and worthy of a blog post...

Thanks Lindsey!

 

 

January 04, 2011 04:33 PM #121
Rainmaker
808,651
Lyn Sims
RE/MAX Suburban - Schaumburg IL Real Estate - Northwest Suburbs of Chicago - Schaumburg, IL
Schaumburg Homes

In Illinois, the bank has the right to protect it's asset if abandoned.  Often times the bank will 'stretch' that right to the extreme.  They actually do not & the police really do not enforce their breaking & entering.  Once they (creeps that lurk around these places peaking in windows) figure the house is kinda, sorta, maybe, vacant - they change the locks & say it's their right.  As Gayle said above, 'secure' is a nice word for burglary.  I have YET to find anyone to enforce any laws about this stuff.  Wonder if the actual bank wanted to do it OR the hired company said - we need more work, let's just punch off the front door lock & winterize this place?

I'm not sure I'd want Lindsey's job #70 and #72.

January 04, 2011 04:36 PM #122
Rainer
10,609
Jan Bradshaw
The Bradshaw Group - Greenwood, SC
Lake Greenwood Relo Specialist

...and welcome to the world of short-sales, foreclosures and the new (hopefully temporary and short lived) world of real estate!

Cheers to the good ol' days! (you know, the ones when it at least seemed like we were all on the same team and working toward a common goal)

:) 

 

January 04, 2011 09:32 PM #123
Rainer
83,668
Jamie King
Hoty Enterprises, Inc. - Huron, OH
Sandusky, OH

The banks are overstepping their authority. Had this happen to one of my listings. The homeowner had relocated to another home he owned to take a different job. The home was maintained, utilities on, etc. and the bank rekeyed it. Lost a sale because of it. The bank insisted they still wanted me to try to sell it but it took them over a month to send me a key to the new lock and by then it was less than 10 days to the sheriff sale. It wasn't enough time for me to show it  and get the offer to them in time to be considered. AND of course the bank ended up selling it months down the road for less than my buyer offered to pay. Just irks me!!!

January 05, 2011 09:06 AM #124
Anonymous
Anonymous
Karen Paris

My experience has been that the banks want to be sure their asset is safe. By contacting the asset managers, short sale processing division and foreclosure division of the involved bank up front and letting them know goes a long way.

.Usually the owners insurance is still in force even if their mortgage payments are delinquent because it it has been paid yearly and escrowed monthly. Check to see you clients insurance is still valid, if it is let the bank know and provide proof of insurance. Offer to give them a key this also works.

I have also had homeowners self winterize banks also seem to like that.

 I have been able to keep them from changing the locks, you need to be as forceful as they are, stand your ground and let them know you also do not want the property damaged.

Do go by your listings daily, asset management companies will go by and put tags on the door and windows stating vacant and intent to change locks. Sometimes the person you spoke to does not get the info to the door knockers as they are in different states. If a label is posted you need to call and begin again.  It is time consuming but worth it if it keeps you house available to buyers and agents.

Some banks will only allow you one call per file per day, If you have more than one division to call conference calling can be quite helpful and even if you call document all calls with a follow up email of  points covered keep that paper trail.

Shorts sales require much time and detail create a spread sheet of daily to do's and start with call in them every day to be sure it does not go into foreclosure. Call the auction house as well just because the foreclosure department said they called them does not mean they did, follow up.

January 05, 2011 10:19 AM #125
Anonymous
Anonymous
Peter Michelbach

Leolinda -- mein Gott (my God), how is this possible??? I also  read comment # 70 --Thanks Lindsay!!

Agree with Lynn #121 -- another great AR lesson. Thank you all for sharing great comments....

....to Leolinda....stay calm...deep breath......relax....imagine.... Great Post. Peter! Peter W.Australia

January 05, 2011 11:06 AM #126
Rainmaker
261,430
Wayne B. Pruner
Oregon First - Tigard, OR
Tigard Oregon Homes for Sale, Realtor, GRI

In Oregon you can't lock someone out of their home without a judicial action. The fact of the matter is that once someone vacates the home, they don't care.

January 22, 2011 02:49 PM #127
Anonymous
Anonymous
Anonymous

The bank has a right to protect its assets but it's not theirs YET!

So, they should strictly be dealing with a Realtor to get the property listed and if there are any changes that need to be made it should all be through the   LA. But, that really makes too much sense so most of them don't do it.

Geeez! If the banks could get their act together think of all the issues that would no longer exist.  <smile>

p.s. FNMA is doing really good in our area.  They've really tightened their ship! Come on Banks!  :-)

                                                           

March 25, 2011 01:39 PM #128
Anonymous
Anonymous
Chris

Can i just say i love the conversation going on here... i work for banks "rekeying" properties and winterizing them. We do everything from debris removal to lock changes to winterizations.. We work for BAC, GMAC, Wells Fargo, etc..

First off us as contractors are told very very little about the property. We are told to leave if there is personal belongings in the house...

It is funny that everyone is attacking the bank for preserving the house but yet when we (preservation contractors) dont show up on time in February and the entire heating system freezes and floods out the house we are to blame.

This has happened to me firsthand. There was a property for sale by realtor. We were sent by the bank to winterize the home, i called the listing agent 3 times with no response at all. We reported this to the bank, a week later the bank sent a Work order stating do not contact realtor and go in the back door and winterize. Well when we got in the street main had frooze and burst and the property had 6' of water in the basement. I called the bank, they told me call the realtor and leave message. Funny how this time he called back, but it was too late. Then the realtor accused me and my company of not winterizing in time and actually tried to file suit against my company. Luckily the bank stepped in and he backed off.

In my day to day realtors NEVER call us back, or we call and they threaten us, call the police (who by the way allow us access into the property)..

I just wanted to tell the other side, my opinion.. I don't say any of this to start arguments or to get yelled at, just my .02

Thank you,

Chris

May 08, 2012 02:38 PM #129
Anonymous
Anonymous
Chris

one more story as i can not resist...

 

went to a property that was "cared for" by real estate agent...

 

walked in to 4 dead cats, cockroaches throughout home, fridge FULL of food (i guess you could call it food by the time we got there...) more like maggots with a trace of food..

this said property we tried to access 6 times but every time the real estate agent maintained he was "caring" for the property.

we then had the glorious job of cleaning out the house...

 

ps- i have 2 cats and 1 dog from homes where the people left them behind... left notes in the home, its been a year, funny noone hasclaimed there furry friends

May 08, 2012 02:42 PM #130
Rainmaker
593,600
Sun City Grand Homes Surprise AZ Real Estate Leolinda Bowers
Long Realty West Valley Sun City Grand Surprise Arizona - Surprise, AZ
Associate Broker Realtor Arizona Golf Communities

Chris, it's concerning to hear that the la is non-responsive to your phone calls. This should be reported to the bank. I don't list foreclosures or short sales but show many of these properties. I too experience similar non-contact from the la.

Regarding pets, I once tried to get into a short sale property but couldn't since the key was not in the lockbox. I could hear the dog barking inside. I called the la, no return call. Two days later the la called me and told me that a new key was being placed in the lockbox. I arrived at the property the same time as the la, only to find the dog had not survived. Sad.

Thank you for stopping by, your comments are appreciated.

May 09, 2012 09:29 PM #131
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Rainmaker
593,600

Sun City Grand Homes Surprise AZ Real Estate Leolinda Bowers

Associate Broker Realtor Arizona Golf Communities
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