Into the Short Sale...why such a price drop and what to expect.

I hope this will be the right forum to ask these questions as I can't find a good forum with as much info with SS and Equator knowledge. Let me start at where this house has been. The house was put on the market as a Short Sale January 28, 2010. Here's the timeline...

Apr 13, 2011	Pending (Pending With Release)	--
Mar 22, 2011	Relisted (Active)	--
Dec 27, 2010	Pending (Pending With Release)	--
Dec 23, 2010	Price Changed	$309,000
Dec 17, 2010	Price Changed	$339,000
Oct 01, 2010	Relisted (Active)	--
Aug 11, 2010	Pending (Pending With Release)	--
Aug 03, 2010	Price Changed	$365,000
May 05, 2010	Relisted (Active)	--
Feb 13, 2010	Pending (Pending With Release)	--
Jan 28, 2010	Listed (Active)	$400,000

Mar 11, 2005	Sold (Public Records)	$729,000
May 09, 2000	Sold (Public Records)	$402,500
Apr 16, 1997	Sold (Public Records)	$236,500	--

All prior contracts fell through-no fault of property just the wait time involved. We put an offer on April 10, 2010 along with 2 other cash offers (investors) that had already been in. The seller countered and we offered $314,000 and he accepted. Now, we are in the Equator system and have been approved on two of the tasks (offer task and personal info/pre-approval letter task). My agent has kept me up to date on all the "goings on" and the selling agent has been through Equator many times and is familiar with the system. He said the two tasks came in quickly and thinks the BOA will be next, My agent said this property has a sell date and is close to foreclosure (on Redfin 461 days) so she is confident the bank would like to see this property sold soon.

Here's my concern...the house is in good condition, only minor cosmetic things need done. I'm concerned on the BOA coming back much higher than we planned to offer. With short sales (with this house being so close to foreclosure) in your experience, what is the likelihood of the them counter-offering? Also, we are FHA and my broker said that the FHA appraisers are tough on appraising short sales. What's an easy fix to me (weeds 5 ft high, one bathtub needing a new water spout, rugs replaced) might lower his appraisal so we don't get the $304 loan we need. We've run comps in our area and similar homes are going for (including SS and foreclosures) are $25,000 more or less away from the offer we submitted). Why such a dramatic price reduction in the last year? We really want this house and can wait for it...my only concern is the BOA and our FHA appraisal screwing it up.

Thanks so much for the incite into this. I figured a wait would be imminent and I'm expecting counter offer(s), as well. I will take the advise, seriously. There was nothing said from my agent nor the selling agent about an auction...just that it's close to foreclosure. With the drops in housing prices due to the amount of forclosures and short sales in my very small community, what really is the best gauge on a Fair Market Value? Just doing comps? 5 years ago, the houses here were so over inflated (as many were) and it's has risen very little in the last 3 years since the bottom fell out. I don't have a house to sell (that's why we are willing to wait for this one) but I rarely hear of any "good" stories coming out of waiting for the home you want. I want the bank to know that we are serious but I'm not going to agree to an outrageous counter offer, either just to have it. I've read this forum up and down (as well as others) and noticed some people agree to as little as $500 to "appease" bank counter offers. Almost, to give them the upper-hand, so to say.

Thanks again Smitty & Harry!

Replies

Darlene Pieracci May 8, 2011 at 4:35pm

Thanks, Kimberly. I asked my agent to find out about the TS and she's going to ask. I feel the listing agent isn't as aggressive as he should be at this point ...so now I need to hound my agent.
Kimberley Kelly May 6, 2011 at 12:32pm

I'm working in CA also so am familiar with this and it is as Harry states. NOD has surely been filed. TS has probably been post-poned a couple times so there may not be any more post ponments left. Those Early tasks are auto response tasks so mean nothing except that you are in the system. Your Listing Agent has to be pressuring the Lender for this one..it's always on the List Agent side..not your Agents. If the List Agent isn't on top of it and cannot answer these questions when your Agent asks them, then I would suspect the List Agent is not aggressive enough. There may be a 3rd party negotiation company that is not pushing hard enough. Your Agent needs to contact the List Agent and get some answers..now!
Darlene Pieracci May 4, 2011 at 11:28am

I will do just that, Harry. Thanks.
Darlene Pieracci May 4, 2011 at 10:17am

Thanks so much for the incite into this. I figured a wait would be imminent and I'm expecting counter offer(s), as well. I will take the advise, seriously. There was nothing said from my agent nor the selling agent about an auction...just that it's close to foreclosure. With the drops in housing prices due to the amount of forclosures and short sales in my very small community, what really is the best gauge on a Fair Market Value? Just doing comps? 5 years ago, the houses here were so over inflated (as many were) and it's has risen very little in the last 3 years since the bottom fell out. I don't have a house to sell (that's why we are willing to wait for this one) but I rarely hear of any "good" stories coming out of waiting for the home you want. I want the bank to know that we are serious but I'm not going to agree to an outrageous counter offer, either just to have it. I've read this forum up and down (as well as others) and noticed some people agree to as little as $500 to "appease" bank counter offers. Almost, to give them the upper-hand, so to say.

Thanks again Smitty & Harry!
Smitty May 4, 2011 at 9:44am

I agree with Harry. They are looking for the "right price" to attract a buyer. We have adjusted price up and down before. We up'd the price $50,000 one time to appease BOA. Interestingly they accepted a lower offer than when we had it listed for a lower price, but go figure. When you see quick price drops, it's an agent trying to get a buyer in. Check public records. There could be an auction on the property as well. Many times the price drops dramatically to generate an offer if an auction is happening.

Again, what Harry said is true. You have a LONG way before you get an approval here with BOA. I also think you should be aware BOA loves to counter, so you could go back and forth many times.

If the property is a bit run down, you'll definitely have a harder time with an FHA loan. They are stringent on appraisals and even require the property to be fixed before approving loan.

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