Bottom line price set by Fed? Or BoA Rules?

I have an offer in on a SS. Short story is:

* Originally listed for $300k (Oct 2010)

* Put in an offer at $250k. Offer accepted by seller

* Bank countered 8 months later with $302k. Thought about it, then...

* Told them they could have it

* They came back with $283k. Told them ok. After waiting for another month an no approval letter, rescinded my offer

* Realtor calls me a month later, says property is back on the market at a 'bank approved' $272k. I tell him write it up.

* After waiting another month, he sends me the following message:

Their response is because of federal guidelines regarding Short sales and internal Bank of America rules the bottom price that they can accept is $277,200

What gives? Has anyone heard of this type of price fluctuation before or is it normal?

I'm not in love with the house, I can walk. But at $302, I was also told that was their 'final offer'. Should I counter again possibly even lower?

 

Thanks!

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Permalink Reply by Jeff Payne on October 10, 2011 at 6:44am

BTW, this is another reason why we make the buyer sign an addendum that requires them to respond to a counter from the lender within 48 hours.  No need dragging these things out

Permalink Reply by peter on October 10, 2011 at 6:49am

Thanks Jeff. Funny thing is, I keep walking away and the seller keeps chasing me ;) I think that is for two reasons:

1) He's not getting any action on the market

2) He knows I can close the deal if I wanted to

 

Last time I walked and signed my withdrawal of offer. they lowered the price, nothing in a month and then he calls me telling me about the lowered price. Then the price jumps $5k.

 

I do not want to put the seller in a bad position, I think he is as frustrated as I am at the 'shenanigans' that is going on and has no other buyers at the moment.

 

 

Permalink Reply by joe beauchamp on October 10, 2011 at 5:10am

BOA greatly manipulates files - mostly to keep the accounts.  Since you seem to be around to keep putting in offers, what do you think of calling their bluff?  Tell the listing agent to submit your offer - include the statements, "Final offer" and "submit directly to investor".  These are key phrases which used to make the BOA negotiator drop his game and do as told.  Then you will see if this is BOA manipulation or real.  If the Short sale is denied, go ahead and put in your higher offer.  A short sale isn't dead until it is dead all over, eh?  Since you seem to have time, you can afford to see if this is BOA playing games.  It would make sense that you would be afraid of them rejecting your next offer because you already said final offer, it doesn't make sense to the investor and I've never seen that happen.  ("internal BOA rules" is very very suspicious - BOA is the servicer, it is investor rules that are to be followed.  That tells me it is BOA playing games - are they trying to say that regardless of what the investor told them is wanted, BOA can do something else?  Yeah, right..)

Permalink Reply by Jeff Payne on October 10, 2011 at 5:58am

Joe, just keep in mind that it is up to the seller, not the listing agent, whether to submit Peters offer.  These negotiators have heard every story in the book, "buyer is going to walk", "this is the last offer" "buyer will not pay anymore" so they are numb to that. 
It would be interesting to know who the investor is.  Peter, do we know who the investor is?  Check with your agent, they should have already asked the listing agent for this information a long time ago.  Once you find out who the investor is, then you can make a more informed decision.

Permalink Reply by peter on October 10, 2011 at 6:21am

@Jeff - I'm asking who is the investor. Will relay any response.

 

@Joe - I have thought about countering. I have already seen once where they blinked first.

Permalink Reply by peter on October 10, 2011 at 6:24am

Update: Was told that the reason for the price increase is because property taxes are due in November. Because of the credit I would get back if we close, they upped the price to compensate for that. Don't know if that is the real story, but that is what I am being told.

Permalink Reply by Jeff Payne on October 10, 2011 at 6:42am

Never heard that one before.  If you closed today, your credit would be pretty small on a $300,000 home.   If the taxes are $5000 per year and you closed Mid October, that is less than $1000...

Your agent and the listing agent should already know who the investor is, that is short sale 101....

Permalink Reply by peter on October 10, 2011 at 6:52am

Just received a reply that they do not know who the investor(s) are. This is my first short sale, so I am learning a lot and thank everyone for their contribution to my education :)

Permalink Reply by joe beauchamp on October 10, 2011 at 8:48am

If "they" are the bank, then 2 things: Federal Truth in Lending - required to say who; 2nd, if they don't know who to wire the money to, then I guess you don't need a short sale since "nobody" is owed the money, eh?

SS reps are told not to let you know. Cust Svc, if they have your authorization (they usually cannot get into Equator) will often tell you.  If you've talked to the negotiator long enough, he'll tell you - if he is a decent negotiator.  Otherwise, they will demand some form be filled out and put on it the next of kin 'cause that is about when they will get back to you with the info..

Permalink Reply by Jeff Payne on October 10, 2011 at 9:50am

Peter, who is "they".  Your agent or the listing agent?  I would be a bit worried about a listing agent who does not know who the investor is on the short sale, that is one of the very first things that a listing agents should find out. 

Permalink Reply by joe beauchamp on October 10, 2011 at 8:58am

You never can tell about those things - taxes, etc.  However, for the taxes to be enough to bump up the price, then logically, there were $0 left over after the last deal - you hammered such a good deal that at $1 more, the investor would have said no.  If that isn't the case, say his bottom line is $10K lower and taxes of $3K have to be paid, well, no, the negotiator doesn't have to raise the price to still meet the investor guidelines.

Regardless, BOA negotiators will give you stories all over the place and many times, in 2 minutes of you looking at the seller's financials, etc., you can disprove what they say.  They don't care that much and are pushed to bring in $$.  My first inclination is not to believe a thing that they say.

I am very used to the negotiator automatically throwing in $5K cash from the seller and/or $20K note from the seller.  I'll go over the financials, usually ask the seller if there is something not there, then talk to the negotiator and ask under these circumstances how does he expect the seller to pay those.  They usually sputter, apparently surprised that I know what I'm talking about.  I cut them from the counter..

Permalink Reply by peter on October 30, 2011 at 3:36pm

I wanted to close the loop on this thread.

 

After negotiating and speaking with the seller, I amended my offer to $277,200 on 10/13 - Thursday. (This is lower than the original offer I accepted and I believe the house is easily worth this).

 

I was told  we would have an approval letter the next business day. I expect a letter on 10/17 Monday, but also realize this may be more posturing by the bank. On 10/18, I get a note that we'll have it on Friday message.

 

10/21 (Friday) the seller calls me and says the bank has a new program offered by the government where he can get more money back. After talking it over with him, he makes the decision to forgo the new program (a bird in the hand...) and says we should have the letter by 8PM. Side note - from next week, to tomorrow, to 8PM ;)

 

To my (pleasant) surprise on 10/25 I receive an approval letter. Can it be? After 1 year we finally have an agreement? Looks like it. We are schedule to close first week of Dec and I can't see it not happening.

 

Thanks to all who replied and I hope this helps out someone else.

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