Replies to This Discussion

Permalink Reply by Michele M. Hunt on July 25, 2013 at 9:35am

Hello Sandra,

There really is not enough information in your question to answer this properly, but hopefully I can help shed some light on your situation.

You said that Wells Fargo 'approved' the short sale.  There are several types of short sales...some are pre-approved, such as HAFA and the co-op short sales, and these are great because they really cut down on the time it takes to close escrow.  The valuation process (BPO and/or lender appraisal) has already been completed and now it is just up to the parties to close the transaction according to the pre-approval.  

The most common type of short sale has the short sale approval process that occurs after an offer is already received.  This means that the BPO (Broker Price Opinion) or appraisal will occur during the approval process, and (hopefully) the written short sale approval will occur in a reasonable time after this, because BPO's/appraisals are usually only good for 90 days.  Once this occurs, the transaction is cleared to close according to the approval letter. 

So, you see that your question doesn't really make sense (which is okay, since short sales are tricky to understand).  The only time that a BPO would be done AFTER an approval is received would be when the written approval has expired, and an extension has been requested.  If the BPO/appraisal was close to the 90-day mark, then the new approval cannot be given until the new BPO/appraisal is completed. 

The only agent that can contact Wells Fargo and request an escalation is the listing agent/broker.  If your agent is not the listing agent, there is nothing that they can do.  Hopefully, the listing agent is skilled with short sales...otherwise, it can be a complete nightmare to everybody involved.  Even with a skilled agent there are a myriad of things that can go wrong...and really, it only takes one.

I sincerely hope this helps you understand.

Best of luck to you,

Michele M. Hunt, CRS, GRI, e-PRO, SFR, CHS, CDPE

Permalink Reply by sandra McCumber on July 25, 2013 at 4:19pm

Thank you Michelle,

As you can see, I am as confused about the entire short sale process as well as where we really are at in the process. I appreciate your feedback and will contact my agent tomorrow and share this information, and this website!

Thanks again!

Sandra :")

Permalink Reply by sandra McCumber on August 5, 2013 at 12:00pm

Hi Michelle,

I contacted the agent this afternoon on where we stand today in the process on our offer on the short sale.  She did tell us the BPO has come back and the bank requested an appraisal on the home, that was completed on Friday, last week.

Normally a bank would not request an appraisal at their expense but from what I understand the BPO (and the have had at least 6 different ones submitted) have probably come back way high, and way low....so, can you shed some light on what course of action we should take if the offer comes back higher than our initial offer?  I would think the bank (Wells Fargo) would have to follow guidelines for comps sold within the last 6 months, and within the same area code? Is that correct?  Thanks for any insight you may  add.

Permalink Reply by Jeff Payne on August 6, 2013 at 7:42am

Who told you "Normally a bank would not request an appraisal at their expense"  Banks  order appraisals at their expense all of the time.  

Permalink Reply by sandra McCumber on August 6, 2013 at 12:39pm

I was thinking that the bank would not bother with the expense in requesting an appraisal and just go with the BPO, from the investors, and if the offer came back too high, we would need to pay for the appraisal to justify our offer.

Permalink Reply by sandra McCumber on August 21, 2013 at 7:47am

Michelle,

Hi! I am following up with you to let you know I found out by doing research that Wells Fargo has a forelosure that was done  on 07/17/13 and scheduled the home for auction on 08/29 at court house steps!!

We just extended the contract last week, and the home was being appraised by the bank 2 weeks ago. Last night I saw the property (which is in the state of Florida) went from pending to Under Contract? What might that mean? They accepted our contract? But why is is scheduled to go to auction and why didn't anyone call us to say the bank accepted or rejected the offer....Now it looks like we will have to go bid on the court house steps on the 29th. What do you think we should expect?

Thanks for any insight....You are right...it is a nightmare. A home in the same subdivision just sold for 124K, the bank initially had it listed for 160K as a short sale over a year ago....

so confused.

Permalink Reply by Fred Shocklie on July 25, 2013 at 9:44am

Short sales are a long process and they are complicated by the fact that each type of loan (Conventional, FHA, VA, USDA), each investor (the loan owner), and each servicer (the company that acts on behalf of the investor) all have different requirements and processes. Its further complicated that the people involved have little to no knowledge for finance or real estate . They are trained to simply make sure the checklist is completed but rarely do they know why. The Listing Agent is really the driving force in a short sale and there can be multiple things that have to be negotiated such as junior liens, homeowner associations, and creditor judgements that can create additional liens on the property. All these issues add time to getting a short sale approved. As you can see, there are so many factors that cause each short sale situation to be unique. Without knowing the particulars of your transaction, it is difficult to give you anything but extremely general advice.

Usually, a BPO is part of the initial stage of gathering documents. The seller will have to keep updating "aging" documents such as their pay stubs and bank statements. Once all the seller documents are gathered, their hardship verified and property value established, it goes to the next phase which is negotiation. If the seller or listing agent does not complete tasks in the specified time frame, the short sale could be closed out and they will have to start over. Again this is just a general overview of the process and there are numerous factors that come into play. Once in negotiation, that person decides if your offer is acceptable to the investor. Most often, investors give servicers guidelines as to what is an acceptable offer and the servicer acts based on those instructions and probably has no communication with the investor. If your offer falls below the acceptable net to investor, you may get a counter or your offer may simply be rejected.

The fact you have been at this for 12 months sounds like there is something that is keeping the transaction from moving forward and the only person who can tell you what is holding up the approval is the listing agent or the seller. Your agent should contact the other agent and inquire further. If you unable to ascertain what the problem is and if it is fixable, you may have to move on. But only you can make that determination.

Permalink Reply by sandra McCumber on July 25, 2013 at 4:18pm

Thank you so much for the information you shared! I'm going to contact the agent who is handling the short sale and ask him to contact the broker who is showing the property as pending.

I know the contract offer that we made had to be extended twice by our agent and it was just 4 weeks ago we were told the bank accepted the short sale by the sellers involved and a BPO was sent out.

Thanks again!

Permalink Reply by sandra McCumber on August 5, 2013 at 12:01pm

Hi Fred, I contacted the agent this afternoon on where we stand today in the process on our offer on the short sale.  She did tell us the BPO has come back and the bank requested an appraisal on the home, that was completed on Friday, last week.

Normally a bank would not request an appraisal at their expense but from what I understand the BPO (and the have had at least 6 different ones submitted) have probably come back way high, and way low....so, can you shed some light on what course of action we should take if the offer comes back higher than our initial offer?  I would think the bank (Wells Fargo) would have to follow guidelines for comps sold within the last 6 months, and within the same area code? Is that correct?  Thanks for any insight you may  add.

Permalink Reply by Fred Shocklie on August 5, 2013 at 12:35pm

Well Sandra, you have stumbled upon a loaded question. :) Property valuation is currently a hotly debated issue among real estate professionals causing much angst and consternation. The normal real estate practice is that homes are sold for the appraised value. When Wells is the lender, they won't lend one penny more than the appraised value. But when Wells is the seller and depending on who actually owns the loan (investor), the answer is No, they counter for whatever the investor says they will accept to "settle the debt." A short sale is actually debt settlement that has a property attached. Have you tried looking up the property address using Fannie Mae or Freddie Mac's look up tool? If you find that one of these two own the loan, then expect to a counter at a wildly inflated value. The listing agent will need to be able to submit compelling documentation on why the property is not worth what they are asking. And you will be surprised to find out that an appraisal is not a compelling enough reason. Confer with your agent and determine what the property is actually worth and what your lender will lend on the property. Always counter and it doesn't hurt for your agent to supply the documentation on how you arrived at your value.

I wish you much success and I hope you are able to close. You must love this property to hang in as long as you have. I hope this helps.

Permalink Reply by sandra McCumber on August 5, 2013 at 3:56pm

Thank you much Fred! I did use the look up tool a few minutes ago but after putting in the property tool, it said I must have permission or be the owner of the property. Of course, I didn't check on the x because I don't know if I have permission to do so.

Please let me know if I do, othewise, I'll ask the agent to do this for me.

Thanks again for all your insight..I'll let you know what I find out!

Take care!!

Permalink Reply by Fred Shocklie on August 6, 2013 at 8:24am

The listing agent should know so ask your agent to find out. If it is Fannie Mae, Freddie Mac or FHA, there is an escalation process. There is a process on the others but not as clear cut as these. Also, it does no good to threaten to cancel. If you have had enough, just move on.

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