Almost 7months ago we put an offer on a distressed short sale home.
( Not sure if I am using the term distressed properly because what I mean is an abandoned old summer cottage that needs significant amount of work to make it liveable. The value is in the land and the foundation and septic system since there is and has been a building moritorium in this town for a number of years due to an overloaded sewage system in the area).
Anyway, we did our research and strongly believe the home to be worth no more than $250,000 on the high end. Our offer was $200,000. After 5 months the bank finally responded with $340,000. We countered with $210,000 and the bank came down to $272,000. We said, "No, thanks" and were prepared to walk when the sellers rep asked if we could supply a detailed report from a licensed contractor as to what we thougth the work and cost of work would be to make the house liveable.
We did this and the bank ordered a new BPO. The value came back at $258,000. We went up to $220,000 and the bank said their net on the first lein needed to be $224,000 and the second would get $6,0000 so they would accept $252,000 from us.
We just responded with our best and final offer of $235,000 which would net the first lein about $210,000.
Our agent doesn't think they are going to go for it. And, frankly he seems kind of done with the whole thing. We are so close only $14,000 away from their net. HOW CAN THE BANK PASS THIS UP???
The foreclosure date is 2 weeks from today. The home has been on the market for 2 years. According to the court records this has been going on for 3 years.
$235,000 will actually be around $242,000 for us with all the closing fees etc and it truely is our best and final....it kills us to be so close and so far.
Anybody have any words of wisdom for me?
Both leins are with Wells Fargo and total around $500,000....for what it's worth. Seller tried to file bankruptcy a year ago but it was denied.
Thanks- Britt
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If the seller's attorney came up with this, then the seller would have already agreed. Since the seller was denied for BK, that means he had some money/collateral somewhere. He's probably realizing that paying $16,000 is getting off cheap, compared to the $250K plus deficiency someone could be coming after him for. Can you say Strategic Default? Sounds like great news for you.
WOW! Check out this new development.....the seller's attorney just sent us a new HUD-1.... It shows the seller coughing up the difference of $16,000 so that the 1st and 2nd can get what they want. My husband is calling our agent now to get clarification on this. We thought he was getting our of this free and clear
Isn't that kind of rare, for the seller to pay anything?
It would be awesome but, I just can't believe it......
Britt, sorry for your ordeal. If the seller was denied for BK, I'm surprised the banks are approving his short sale. As to "how can the bank pass this up", you have to remember that common sense does not necessarily enter this equation. On the other hand, if it sells at auction, the bank saves about $24,000 in commissions, 2nd mtg pay out, fees, etc. Don't get any more committed to this property, but if it doesn't sell at auction (I assume you don't have all cash) it will be available again as a REO.
Here is what I don't get...the property has been advertised for foreclosure in the past at around $445,000. NOBODY would pay that for this property. Therefore, the only buyer for it will be the bank, correct?
Then the bank will own a property that would require at least $75,000 to make it liveable. (I don't mean a new kitchen and new baths liveable. I mean, new roof, new siding, foundation repair, electrical and plumbing fixes, flooring and ceiling repairs liveable.)
If the bank then owns it, it could take months (6-12) for the courts to ratify and the property to become an REO, correct?
Ultimately the bank just keeps losing money during that process.
If that is the case then you are right, common sense doesn't enter the equation.