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Looks like the listing agent may have had their own buyer but wanted to get the process started and you were the guinea pig. I bet after it closes you will see the listing agent double ended the deal. For future reference you should always make an offer based on how badly you want the property. If you want it bad enough, offer above FMV (notice i didnt say list price, list price is irrelevant). A bank will not accept an offer that is not FMV. Even if you offer above FMV and it doesn't appraise, you can go back to them and ask for a reduction which they usually accept because they already know FMV based on their BPO.
It never ceases to amaze me how many folks think they can't beat the system and it looks like you thought you could and got caught in the middle. Those "Carlton Sheets" deals do not exist. When a property hits the MLS thousands of people are determining FMV, so you will always pay a fair price. If you want a real deal, make an offer on a property before it hits the MLS and before a realtor gets involved. A realtors duty is to get the highestd and best deal for their seller.
Good response Noel! (Gosh is Carlton still around?)
Ironically, there are still a lot of "shadey" deals out there!I dont think these will ever go away in the Real Estate market! It is sad, that there will always be "shady" agents as well.
Most of all, as you called "Programs" that consumers get/buy, the "get rich quick" "buy at discount" etc! My Favorite, my "mentor, consultant" is advising me. Another one "transitional lending" Really in my opinion "Fake Proof o Funds" People think they can do this with a simaltanial close,( ha yeh right! ) Especially in a short sale!
Trevor, I hope you got some good direction here! There are no real good deals out there! Short Sales go for market value, Foreclosures go for market value, Traditional sales are going for market value.
Curious Trevor, Are you a "first time buyer"? (if so move on and find your "happy Home". and a good agent) If by chance you are buying as investment? well keep trying.
Regardless, Sorry for your lousy eperience! Hopefully you have enough input to make a good decission
Was it actually a contract, i.e., fully executed by the Sellers and by you? If so, and it was rejected by the Seller's lender, then at the least you should get some sort of communication via email at least, that states that the contract has been rejected by the Lender. Usually there is a reason why but the terms of the contract usually don't dictate that you as the Buyer are going to be furnished with that.
People are guessing about why the offer was rejected and it really doesn't help you with guessing. Too low of an offer? Maybe. Seller's lender not relieving the Seller of the liability for the remaining debt? Maybe. Seller having second thoughts about the process? Maybe. Someone else back-seat-driving the Seller? Maybe. The possibilities are endless because the elements involved with the short sale are so numerous.
The real question is, do you still have any chance at purchasing the house? If the answer is no, then move on and find something new.
Trevor,
I think there's a few issues here;
1) You will never see a Decline Letter from the lender. If a letter was issued it was addressed to the Seller. No one needs to provide it to you. However, if it had been approved they need to provide that letter to you.
2) Short Sale offers are CONTINGENT upon the lender's approval of their LOSS - not necessary the sale price. So, for example if you asked for closing costs, that could kill your deal and someone else could get it for the same "price" you offered had they not asked for closing costs.
3) If there's not a lot of time before the Trustee Sale, the lender is not fooling around with low-ball offers, they don't have time. Recently I've had lenders tell me not to submit a new offer from the same Buyer who made a low-ball offer.
4) You should listen to YOUR agent, NOT the Listing Agent. The Listing Agent represents the Seller (and in a way the lender). Their duty is NOT to YOU.
5) From what you have described, I expect the Seller has accepted another offer (as they rightfully can do) and that offer is now working its way through the approval process with the Lender.
6) Ask YOUR Agent to check the MLS to see if the property shows "Back-up, Contingent, or Pending", etc. If not, you can have your agent write a new offer and the Listing Agent needs to present your offer to the Seller, BUT that doesn't mean the Seller will accept it, nor will you get any answer, nor will it be sent to the lender.
7) Remember, a Purchase Agreement is between the Buyer and the Seller with a contingency of the lender approving their Loss. Neither the agent, broker or lender is a party to the Purchase Agreement - ONLY you and the Seller.
If you were ultimately willing to pay FMV plus $25K in HOA, why didn't you make a stronger offer to begin with? You may have derailed your own deal by being so aggressive / low-ball.
No, you could not speak with the bank directly unless the borrower / seller authorizes you in writing and sends it to the bank - and why would the seller do that - there's no reason. It sounds like there were other offers just waiting on the sidelines.
Finally, I think you need to look for another house. Learn from this process. Listen only to YOUR agent. Make sure the agent you are using has successfully closed many short sales.
Short sales are becoming more convoluted, difficult, and the rules are changing every month and are never the same from one lender / servicer to the next.
Good luck,
Brenda Swigert Realtor CDPE
Coldwell Banker West Shell
513-378-1461
I think the actual problem here is that the HOA came as a surprise. Many time HOA are the biggest problem because the banks wont pay for them. This may have caused problems for the listing agent and the negotiator.
Thanks guys. My offer was within 10% of the FMV and even though I knew it would be low, we did it at the instruction of the listing agent. Our agents agreed on a fair price, and the listing told us to start at 10% below that price. They've had the action date pushed back 3 times already and the bank had just filed for a new date.
Couple questions -
1. Should the bank / listing agent negotiate in good faith? ie. they are now all of a sudden hesitant to submit out second offer, which is for FMV plus $25,000 in delinquent HOA dues. The contract said they could take back up offers.
2. Can I contact the bank directly?
Thanks
Trevor, to add onto Jeff reply:
As for your situation, it really depends on the Owner's situation and how good your was offer vs what the fair market value of the house is? If you've made a reasonable offer, then you wouldn't be in this situation. But if you really like the house but figure you could try to get best deal as possible by lowballing it, by all means you got it coming because any "competent" agent out there would tell you that there is a shortage of inventory across the nation and buyers are in a frenzy trying to get whatever is left. And that right now is the worst time to lowball any property you really like purchase.
Then comes the Owner's situation, if there is an Auction Date coming, you could bet the Listing Agent won't be messing around with low balling buyers, remember he represent the Owner to get the Owner out of Foreclosure, he does not represent you, the Buyer, to get you the house for as lowest as possible nor does he represent the Short Sale Lender, to get the Lender as highest of an offer as possible. Although most times it appears as though because the higher the offer = the higher chance the Lender will accept = the higher chance the Owner would avoid Foreclosure.
Then considering the Auction Date was pushed back 3 times already, chances are the bank will not give another postponement and the deal has to close before the most recent Auction Date.
Don't forget the "lowball" offer was at the request of the listing agent. We wanted to go higher, he insisted that was the right place to start with where we wanted to end up.
What would you have done if the listing agent said to make an offer that was 10% over list price? What does your agent say about it?
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