Wells Fargo short sale but seller contacted me too late... was already 4 months behind in payments. Property has been on market since March 10, 2013 with no offers.
I contacted WF today and they tell me that FHA will enter the home into foreclosure status June 5, 2013 so wondering what I may be up against IF I were to get an offer within the next few days.
I've had properties foreclosed upon during a listing period with no offers, but now I think I may be receiving an offer and I'm just curious what others may have experienced in similar situation.
Depends on your locale as to how much time you have. What do mean by "entering foreclosure status". Here, almost all of our short sales are "in foreclosure" which takes 9 mo.s to 2 years, from LP to sale date, depending.
Frank - As Brian says, you need to pursue a formal FHA pre foreclosure sale status. Ask your seller to request an Approval to Participate. Wells Fargo should get an appraiser out to the property and give you pricing guidance with the ATP.
Thanks. He went the formal FHA re-listing application for short sale route, but I'm not sure about the ATP letter so I will look into that. I won't even get into the fact that the house caught fire this past October and we just recently received our clear claims letter a few weeks ago. Thanks again.
Sounds like a FUN file to play with!!!.
You didn't mention what type of foreclosure, administrative (trustee with right to non-judicial) or legal (court based) action. This is always inportannt information when asking such questions.
Be sure and do a very complete BPO....at least two sales per month for 6 months if possible .....shows trend in value and current value....
Also be sure to use ONLY excellent comps...10-15% in sq footage and lot size AND only excellent scocio-economic, subdivision and build similarities and locational similarities (schools, shopping, road access, city vs county and all other variances minimized. Be sure and adjust very well the comp to subject including all ameneites, number of beds baths garage size etc....be maticulous. Be sure and use properties of similar condition (meaning distressed as to foreclosure etc) and adjust for any required maintenance, construction etc.....
Also, if the property is NOT inhabited it will have lower value, and if not habitable lower value still. Look for this in comps as well.
As to repair, As long as no further damage is being done by not having the repair completed, it may be possible to place the repair funds in an escrow type of acct for the buyer to perform the repair and leave the repair unfinished, let the buyer have the $$ at closing even if arranged as a release at % completions of repair. THis is a "think outside the box" idea and may or may not be possible. The insurance will want it off thier books so it must be done carefully as to $$ recovery for the fire. IT will give buyer incentive and the lender incentive as well...get rid of the albatross. Just a thought.
Makes the purchase a perfect for enterprising buyer or investor both.
In my experience the agent's BPO can be very important, especially if a challenge to value is needed and even more so when there are issues such as repair from a fire or other damage, leaking roof, electrical, water pipes, wood rot, soffit rot, structrual damage, etc.
By having the BPO ready from the date of file opening it will make things a lot easier to update and or deliver the information, including bids and estimates etc. Not sure of WF but many allow the upload of BPO or require it at some point.
An appraiser may or may not give the best appraisal and may not actually address the true condition correctly.....and certainly may use properties that do not actually represent the actual consturction, age, build, subdivision or other information. I have seen this many times, including properties up to 5 miles away!!! True they may have "fresher" and at times more complete information, but usually by thier own past appraisal inmformation rather than true comparable property.
As we have seen in this forum (whether or not proven), agents and possibly appraisers have been asked to meet certain value criteria as well. An agent listing a property for sale should have a proper and complete BPO prior to any listing...and if representing a purchaser should prepare a proper BPO as well. So there is no reason not to do the work properly to begin with for all parties benefit.
I agree with your assessment of the "if work not completed scenario". Which would lead to a much lower value at sale as "only cash buyers" would be possible and they would want to assure profit for work performed and for investment as well. This is why a very good BPO is required....using the proper properties in distress and allowing for type of purchaser and if investor, reasonable returns on cash and labor plus materials and overhead. Most investors would want total cost of repairs (material and labor) plus carying time overhead plus 100% of that sum (at least the investors I know of) removed from full retail value at purchase to assure protiable undertaking (eliminate risk).
Complexity can create advantage and value in settlement.
You need to turn in a complete short sale package except the offer right away. Make sure you have a legit hardship and then call and ask them when they are doing the appraisal. Once you get that offer, then turn it in right away as well. In Missouri, I get foreclosure sale dates canceled all the time from WF as long as I get my SS Package turned in at least 10 days before the scheduled sale date. It is better if you have an offer, but you can still get the file moving without the offer depending on how far along the foreclosure process is. Worst case, contact the FHA call center at 877-622-8525 and tell them your side of the story. Sometimes they are very helpful as well.
Like Tony's comment about Missouri, here in Arizona one can get foreclosure sale dates postponed by WF as long as they get my SS Package at least 10 days before the scheduled sale date. More time would be better, because 10 days is cutting things very close if WF decides they want something more.
On the question of how long a foreclosure notice gives the owner, it could be as short as 90-days here in AZ, but in practice it take longer and WF does not seem prone to push it unless there is no action by the seller.
To get offers, you might want to list the home at 10-15% below the traditional sales market to get some interest. You can hope that this will result in multiple offers to get closer to a number that WF will accept.