For those who enjoy the comedy of short sales, here’s a good one.
I’ve had a Tierrasanta condo listed since October, 2009. The sellers paid $447,000 in March, 2007, and financed 100% (I wasn’t their agent then).
They’ve since broke up, and the hefty payment is too much for just one of them to afford, so we’ve been trying to sell it short.
http://Link to SDLookup listing
We found a buyer within a couple of weeks, and we began the normal process. The short-sale division of Equator.com was just beginning, and once we got the buyer’s package onto their system in January we had approval within 30 days for a $350,000 sale.
They produce the final forms for the sellers’ signatures, and the bank includes the right to pursue a deficiency judgment against them, even though it was purchase money. Their lawyer rightly advises them to have me waive the magic wand and make the bank take it out.
The problem with having bank clerks working off a website is that anytime there is a request that is off the regular chart, it gets buried. Sixty days of constant but friendly badgering produces no results, so the buyer gets so frustrated that, when this competing listing comes on the market around the corner, she buys it instead, for $390,000 VA:
Link to SDLookup competing listing
As it always happens, right after the buyer bails, the bank comes back with their waiver of deficiency judgment.
Our asset manager tells us to go find another buyer, and we can plug them right into the same package. Within ten days we do just that, but when we go to upload, our asset manager is gone, and we have to start over. We re-load the whole kit at $350,000, tell the new buyer to be patient, and hopefully we can still accommodate their need for a 30-day escrow.
Yesterday, and bank comes back with a new price – $371,000, based on a $75 BPO that picks up the previous buyer’s purchase around the corner, and adjusts our value up as a result.
There have been a couple of other sales too, $365,000 in April, and $388,000 closed today for a similar 1,491sf – but ALL of the comps are 3-bedroom models, and my listing is a 2-bedroom.
Will our buyer agree to the $371,000? We’ll see.
I’m chuckling. That’s rough luck for your seller and buyer, Big Jim, but hey at least the “system” is semi-working here as opposed to the many short sale frauds where market value is completely unknown to the lender/processor.
Work your magic and get a value reduction, you silver tongued devil.
“The problem with having bank clerks working off a website is that anytime there is a request that is off the regular chart, it gets buried.”
Hallelujah.
But didn’t B of A say when they rolled out Equator that all the delay problems were going to get resolved? Not when the people behind the system have not changed one iota.
I have a B of A deal “off the regular chart” that has been bouncing around since last August. It will probably be another two years before B of A figures out what to do with it. Meanwhile, the property is partially vacant, has a squatter in another unit, is not maintained, and looks like $*%*%&. Gotta have patience in this market, and got to be able to laugh.
THE BUYER SHOULD WALK! Screw that crap.
This is why I completely ignored short sales when I was buying a house a year ago. I figured 90% of them basically had no chance of closing, at least not within six months or so. So I bought an REO instead. The rumor mill seemed to indicate more were closing-guess not.
The buyer should expect a “short-sale” discount–if lenders were timely, such discounts would not be necessary.
I have seen a lot of new ‘short sale’ listings that have the following remark “…lender has no knowlege.”
JTR – I read this as the seller is just begging and hasn’t even asked the bank if they would entertain taking a loss on the loan?
I’d assume that offering on these is a gigantic waste of time for them to experiment with your time/money/energy.
If I was the buyer, I’d counter at $329,000. 🙂
Any appraisal of a house for the purpose of a short sale should automatically knock off at least 5% for it being a short sale. This is the same concept as an all cash offer being a little more.
JP2 said, “The buyer should expect a “short-sale” discount–if lenders were timely, such discounts would not be necessary.”
Totally. Why hassle with a SS if there isn’t something in it for me as a buyer. The fact that it’s a SS has to be factored into the BPO. The 2 BR thing is huge too.
See, this is exactly the kind of thing that’s driving me nuts as a buyer. From the preceding post that Jim made you have the bank giving away the property seemingly clueless to how much money they are throwing away. OTOH here you have some moron asset manager trying to squeeze another 7% out of deal that was essentially done, and could likely result in the buyer walking.
This exact thing happened on a SS property I had made an offer on. All the buyers except me immediately walked when the bank asked for more. I hung around and had some contractors do some estimates on the needed repairs. I eventually came to the same conclusion that the other buyers had and walked too. The property’s still for sale.
sent in by an anonymous agent today
True story, out showing property today, show up to meet the agent, he meets us before getting to the door and pulls me aside. “The husband and wife here are getting a divorce so things have always been a little tense, but the husband is upstairs with a hooker right now in the bedroom entertaining, would you still like to show it?”
We passed.
No joke.
Go Lakers!!
if prices are rising then their request may be justified and you can increase your asking price and try for another buyer if this one won’t go for it. Of course if prices are flat, and a 2BR is worth $35k to $50k less than a 3BR then ask them for a new BPO.
i haven’t checked in on your great blog in a while…. are prices now rising?
I wonder if the hooker was going to make a low ball offer?
What is the discount for a 2 bedroom over a 3 bedroom, assuming the same square footage?
A hooker? I can’t believe it! but I guess you really do see EVERYTHING in your business, don’t you?
I’m the same boat as others here. We put an offer in on a short sale that needed some repairs. We offered our maximum price, which was probably a little too high. The bank came back asking for 30K more and we walked. Now the property is back on the market and it isn’t selling. They just had to lower the price. It feels like the market has slowed down a little.
“Now the property is back on the market and it isn’t selling.”
If you’re still looking for a house, it seems like a grea time to make a lower offer.
JTR- “The husband and wife here are getting a divorce so things have always been a little tense, but the husband is upstairs with a hooker right now in the bedroom entertaining, would you still like to show it?”
OMG! This reminds me of when a friend was having “marital problems.” I said, “I am not qualified to help in this area.” I suggested he seek professional help.
The next thing I know his wife is HIGHLY UPSET with me. What did I do? I suggested he seek professional help.
He went right out and sought the services from those who practice the oldest profession, and then told the wife that it was my idea.
lol.