You have GOT to be kidding me- what BofA wants from short sale buyers now
So according to my negotiator at Service Link, BofA has a brand new guideline: All short sale buyers must provide proof of funds for Earnest Money & Down Payment at the time we submit the offer. (in Oregon EM is not deposited until we have ss approval).
I am beginning to think short sales will soon be a thing of the past..between Fannie Mae's absurdly bloated valuations and BofA roadblocks get me some Xanax. UGH
Replies to This Discussion
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Permalink Reply by Judi Fiolle on
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I have always required these things from a potential buyer in all of my transactions, short sale or not. How do I know if they can actually purchase a property or not without those items being brought forth? There is nothing wrong at all with requiring this information, in fact, if you do not require this information, you will spend a lot of wasted time with buyers that can not buy....
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Permalink Reply by Donna McClelland on
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I totally agree with you, Paul.
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I totally agree!
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Permalink Reply by Pat Perrotta on
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I agree with Bryant, I sell mostly short sales (representing the seller) and I don't allow a buyer without an EMD, I do the same with a buyer I represent. On a regular sale, you expect the buyer to come up with an EMD otherwise, during the negotiation the buyer could say "oops, changed my mind" and have no "skin in the game" to loose. Whether the banks require it or not, I require it, so have never had that problem. I din't even know they did require it, because it's always shown.
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Permalink Reply by Loreena Yeo on
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I didnt realize this until BOA requested it. However, the buyer has no problem showing their proof of funds, because they are serious. We are glad they were requesting for more documentation. That means they are working on the file.
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Lets be serious.
A contract is valid with a signature and consideration. If theres a breach take action. Stop whining.
Lets consider the nonsense in a short sale. First the buyers agents are essentially impotent. Every short sale should include a limited 3rd party authorization to the buyers agent. There really is no excuse for not doing so.
The short sale system has been allowed to perpetuate without regulation. That at part is due to the fault of the Realtors organizations and their lobby. There are no rules and no accountability. There are few excuses for short sales keeping prospective buyers in suspension for months. Its a house thats all it is. Its an easy question does the lender want the house? Yes or No. If yes foreclose. If not get real.
A short sale doesnt happen over night and we're talking about a house and a lender. Lets simplify. The house is either getting sold or auctioned. Thats that. Does the lender want to foreclose? Yes or No? Auction or not? Yes or No? Short sale? Once that decision is made the object is selling the house. Id challenge anyone to show me one deal that a short sale decision and property sale took one day. The lender decide to sell the house. Set the price and take offers. When you have an offer that is acceptable accept it and move on. Its not rocket science.
There is no excuse an approval takes months when they know all they need to know and can start the transaction immediately in most cases. If there are problems communicate the problems ie multiple investors immediately to the buyers agent. The lenders want their cake and eat it too. Putting the realtors in the middle and the realtors allow it to happen because its income and thats just how it is. It shouldnt be how it is.
The system is a joke. Notes are sold, deals and dreams are shattered, lenders acquire property in bunches and often have no idea of the true condition of the property and then try to negotiate for months over a position of presumed strength in a short sale property that is distressed. Why? Because buyers and sellers agents dont get it. The object of the exercise is to get the property sold via the lenders approval. The seller is not getting any profit in the house and has nothing essentially in the game. They want out and there is no liability to them the debt in most cases is wiped out. The buyers and sellers agents should be working together to make that happen in the speediest manner possible.
Im not stupid the listing agent gets paid for essentially being a spectator and the buyers agent gets tortured for having to put up with it. There is absolutely no reason barring extenuating circumstances these deals should take months and months. If you realtors got together you could sure change things. After 6 months of no short sales being accepted Id bet youd see things change pretty quick.
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Now heres a simple question and I cant stop laughing
Does it make any sense for a buyer to disclose their financial standing in a financially adversarial transaction to the people controlling that transaction?
Someone please try and make THAT argument.
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Bill,
Having a buyer show that are Capable of completing a transaction is just good business practice. It is silly to think that showing a buyer has more than enough cash to complete a transaction, would hurt his negotiating position. I have investors showing over $1M cash balances for $100k houses all the time. If a buyer asks us to tie up a property for 60-90 days, and is not willing to show the ability to complete the transaction, my response to the buyer's agent, and the buyer is quite simple....shuffle off.
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Wayne did you actually say that telling a lender how much you can spend doesnt hurt your negotiating position? Did I hear that correctly?
Wayne the contract is the ability to complete the transaction. Period.
Once its signed thats that. The terms are in black and white. Dont accept the offer. Dont accept the terms.
Its no big deal to a smart buyer.
Wayne when you can show me consistently every transaction is only 60-90 days Ill be happy to listen.
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60 -90 days is about right these days Bill....the banks have restrictions on them now to complete their portion of the transaction..... if you are working with agents that do not understand how to complete short sales, I am sorry for you. When I have a buyer in a short sale, I always interview the agent to make sure that they know how to get it done without taking years to complete it...in your comment about a contract...it is correct that it takes a signature and consideration...the consideration is the EMD in the case of a sale of real estate....I also often show financials from my investors of $1 million or more...it has no effect on the purchase price....we have already set the offer price in the contract. we have seen lately that Fannie is coming back to us with inflated values so the answer to that is to contest the value with another appraisal and CMA on the property.....at least until we can get them to knock that stupid, illegal practice off...
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Judi
...it has no effect on the purchase price....we have already set the offer price in the contract. we have seen lately that Fannie is coming back to us with inflated values so the answer to that is to contest the value with another appraisal and CMA
And where do you think it came from? Learning about financials and wanting to take advantage of those they could
if you are working with agents that do not understand how to complete short sales,
What matters is that I know what Im doing. Im not prejudging someone when the whole practice is ludicrous. You cant force compliance on a lender. For most of the transaction they force you guys to be spectators anyway waiting around at their mercy
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no Bill, that is incorrect...Fannie and Freddie are trying to price fix the market...you can read about it if you are interested...I do understand why you might think this is happening but the truth is that the seller and the market set the purchase price, not the bank....we have a situation right now that is technical and best left for you to look up if you are interested in what is going on with the inflated values right now....it does not have anything to do with buyers financials....as has already been said here, a buyer can show POF's by getting a letter from their bank stating that they have funds to close...that will satisfy the bank on that issue....as far as giving the EMD to escrow, that must be insisted on by the sellers agent in order to assure the seriousness of the buyer.....if the buyer backs out during the transaction, the EMD goes to the seller....without the EMD in escrow, there is no recourse for the seller after they have taken the property off the market in good faith toward the buyer's willingness to purchase....it might be an easy thing for the buyer to move on without giving an EMD but the seller could lose their home to auction by wasting all of that time with a buyer that walks.....
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