Short Sale Hell
I have been trying to buy a short sale in Flordia for ten months now. I have no more idea today where we are in this process than I did in March when I made the offer. My agent is a nice guy but all he ever tells me is there is no new information or it is moving as expected. The seller is also an agent and it appears she is handling more of the processes but I have no contact with her. I cannot imagine how this has taken this long and appears that it will continue to drag out even more. I believe there is a comapnay called Short Trac involved and her mortage is with Coldwell Banker, same place she works. Am I crazy thinking this is ridiculous or is this just to be expected. I probably am not supposed to be on this forum but I am desperate for some advise. Should I hire an attorney or am I just stuck in this sort sale purgatory.
Thank you,
Pam Mingo Sain
Replies to This Discussion
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Permalink Reply by Tara Samney on
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Bill you wrote "When they get the offer the appraisals should be done".
This is not true. While some programs such as FHA, B of A co-op, etc do the appraisal before an offer comes in (and often give a recommended list price). Many lenders will not do an appraisal or even look at a package before an offer comes in (investor dependant also). Unless the listing said the list price has been suggested or pre-approved don't make the mistake of thinking the appraisal/BPO has been done by the lender. They usually expire in 3-6 months anyway. Wait time is not just looking at the offer but often qualifying the seller for the short sale.
I agree it would make the most sense for the BPOs to be done early- but whether it is the expense that prevents it or other reasons....that is not the way it always works. Even when they have the BPO in hand it is not a quick process.
Buyer agents really need to educate their clients (and themselves) when making short sale offers. I've yet to see a listing agent indicate a quick approval/ closing unless it was a pre-approved price (and even then we are seeing on here that is falling through lately during investor approval for Bank of America).
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Permalink Reply by Susan Highland on
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It's pretty easy for a buyer to get a general idea of a properties value by looking at the address on the Trulia.com sattelite map. Property lines of neighbors, AND last sold price and year are there, with the property size, sq.ft, beds/baths etc for easy comparison.
True Trulia is NOT an official or updated site, but it helps to get a general idea. And anyone can go to the county records ofice, sit at a computer there, and find out who the owner of the property is. Not sure how you find out if there is PMI insurance on the loan though.
Suzi
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Permalink Reply by Bill Sloss on
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Thats generally true loosely. But it means little without seeing the home and understanding whats up.
In a short sale notes are sold in batches. The lender who acquired the note may be thinking the house is in great condition which may not be the case.
Prospective buyers need to make the condition of the house known to the lender ASAP when their offer is submitted to save themselves that aggravation pricing later.
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Thank you for your kind reply.
Yes it is true. Why string a prospective buyer along?
"Many lenders will not do an appraisal or even look at a package before an offer comes in (investor dependant also)". I said when they get the offer.
"While some programs such as FHA, B of A co-op, etc do the appraisal before an offer comes in (and often give a recommended list price)." Then there should be no secret ir delay in accepting or rejecting the offer.
"Wait time is not just looking at the offer but often qualifying the seller for the short sale." Then why list it as a short sale?
Far too many games if you will. Either they want the house sold and have the price or dont. If they want the house sold. Get the price ASAP and sell it.
If they have the BPO in hand disclose it ASAP. Buyers know how much they will spend. Its not rocket science. Its bureaucracy. When they get approached by the seller who says I cant pay for the house the wheels should start turning. Im looking at one that was set up for public auction and was cancelled the day of the sale. Its been over 40 days and I still dont have a BOP or appraisal info and its been listed again right after the last one. Who should be pushing the lender?
If it was ready to go on the first sale date it was ready to go. Nothing needed done. Its not a big deal to me I laugh at it but there are people who dont know better and get tortured by the process.
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Bill - I should have corrected you then that they often don't do the BPO right away even getting an offer.
The seller initiates the short sale, not the lender. The lender is not in any rush to do a short sale. They will get the house one way or the other if the seller doesn't pay. Just because a short sale offer is made or listed- does not mean the lender will accept the offer or the short sale- that is why they are subject to a contingency.
Short sales are often listed without pre-approval. Lenders say list it and bring an offer before they will look at anything. Such language is usually included in the MLS and discussed with buyer's agent. The agent needs to prescreen the short sale (or the buyer needs to do his/her homework) before making an offer. They are subject to the short sale contingency which is included in contract language.
No the wheels do not start turning once the seller approaches them to sell the house. It would be great if it did- but it doesn't. No amount of pushing changes very defined investor guidelines. As I mentioned in my reply- it varies widely on investor. I varies on the extent of financials by the seller, by the negotiator's workload, by the skill of the listing agent, by the willingness of the seller to provide updates and all documents when needed, by the buyer and agent to return affidavits on-time, by the negotiator's desire to help, by the strength of the offer (better ones do get pushed through more quickly), by the MI company, by the investor's timelines, by the imaging department putting a file in a correct folder....and the list goes on.
BPO is usually not disclosed because it is confidential during negotiations. It is no different than a seller having an appraisal done on his/her house and not revealing it to hope to get a higher offer.
I'm not saying it is the way it should be...but it is the way it is. Hopefully, it will get more streamlined...soon. I've had approvals in weeks and others that took months...
Buyers who make offers who want to hear something other than what their agent tells them (or poorly educated agents) just set their client up for agony. They really need to prescreen the chances of the short sale going through up front. Not all short sales have equal chances of approval (even WITH a good offer) and anything can happen along the way.
Short sales are not for every buyer or agent. If a buyer can not handle the uncertainty and wait they should look at properties which are non-distressed. Thank goodness for those buyers that like short sales!
As to far too many games.....perhaps short sales are not for you. They are not for everyone. Many buyers have agents just take them out of their search because they want a quick approval. If you don't understand how the process works (and not just what you imagine it SHOULD work like)- then you will just set yourself up for torture.
As you want a home that is battling an auction date, it will likely come back up in a few months as a REO if your offer and no other offer accepted as a short sale. It may be too late for the short sale depending on the investor. You may be able to get it then with a whole lot less wait- as the lender will be selling it then, not an individual. Who knows, you make even be able to get it for less, especially if it sits!
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Thats all swell.
In my case the house was pulled from the public sale. That didnt happen without a reason. If they wanted it sold all they had to do was reject the offer and bye bye. They didnt.
The reason was my offer. If they made the decision to not go public then one would suspect time is of the essence.
As you want a home that is battling an auction date. Did I say battling an auction date? The order to sell was dated before my offer. Im not battling anything.
The seller initiates the short sale not the lender? Did I say otherwise?
As to far too many games.....perhaps short sales are not for you.
You havent had much luck correcting me and if its okay with you Ill decide whats for me and whats not. I have a problem with incompetence and mediocrity. And if I might say so youve given me far more examples of that than rationality.
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Permalink Reply by Sherry Pyszczynski on -
You stated that the seller is an Agent, is she also the listing agent for this house? If so, that could be a major problem.
Coldwell Banker typically is not a mortgage company, they are a real estate company. Do you know whether they have completed a BPO? Have they made any counter offers to the seller? Some short sales take forever, some short sales do not ever close. In order to have a grasp as to what is happening with yours, you need your agent to get in there and get some real information as to where this transaction stands.
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The seller is not the listing agent. The listing agent and my agent are in the same group so you would think communication would be easy for them. When I ask for info I get responses that indicate there is no new infomation which really seems to be true. I was told in December that a BPO was being done but no info on that yet either. I was recently told that the bank has everything they asked for and that they will probably want more financials from the seller as they have been asking for these almost monthly. I am just ready for this to be over, one way or the other. The most frustrating thing is not understanding why the bank does not want to dump this property. My understanding is it has not had a lot of interest, has been empty for 2 years and now needs a lot of work which I am willing to deal with. On Realty Trac Coldwell Banker is listed as the mortage holder but I have a copy of an earlier lien that lists US Bank as trustee for Lehman Mortgage which is confussing to me also.
Thanks!
Pam
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I agree with you Pam...I am just ready for this to be OVER. Major changes should be made by law concerning how short sales are handled. A buyer should not be put thru all this! It should be between the lender and seller until they decide what's going to happen. Will it be sold as a short sale or at auction. I've been waiting over 8 months and now find out if the lender forcloses (because of PMI insurance) it will go to auction. And then some investor with cash will outbid me...if I can come up with cash to even bid. Which I doubt I can.
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Hang in there dont forget youre dealing with people who dont share your interest in speed. A short sale is better than a public sale so its to their advantage to try and work a deal with you. Look at the court docket and see whats going on. It may not have even foreclosed yet. Do your best to minimalize your anxiety and the more you know the better off youll be. Never underestimate the power of stupid people in large groups. You can certainly ask for a statement if it has a PMI.
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Thanks for the reply, but again...why would the lender short sale the house to me, if the house has PMI insurance? And why does this whole short sale process allow the banks to even involve buyers until they know how they're going to handle the sale. It makes absolutely no sense. If they're going to go to public auction anyway, why tie-up a buyer for close to a year?
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Ill guess and say either the guvmint or the insurance people have some requirements as far as what they settle but I dont know. It happens because there are few rules and the lender essentially has the power to do whatever they want. They think nothing applies to them and theres no enforcement that I know of. Plus its all complicated by the investors and multiple mortgages.
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