We are in WA state and made a $1,000,000.00 offer on a home on Feb. 22, 2011 that has a $2.4mil loan. Our agent is not very experienced with short sales and has only done 1 short sale. Seller's agent is also not that experienced so I come to all of you for help! Bank is BofA. BPO was done by an appraiser who went in the home and who came in at $1.1mil. Seller built this home, the one next door and a few others in the town. This home and the one next door both never sold and are substantially the same with one next door a bit smaller. This home is 10,500 sq. ft. and the one next door is 8,300 sq. ft. both on the same amount of land (not waterfront mind you!!) and both built at the same time - 2006. House next door went into foreclosure last year and was foreclosed on at the end of the year. The day of the BPO (a few weeks ago), house next door went back on the market at $804K. Appraiser was notified of the comp next door and still came in at $1.1mil. House next door went off the MLS recently as pending presumably because someone has made an offer on it. Further complications are the amount of liens on the property - we have been told upwards of 12 liens - the seller owes money to everyone. Seller's agent thinks she can get all of them reduced to $2,000/lien. Yesterday BofA came back with their counteroffer of $1.1 mil and will pay $6K towards liens. We have 10 days to accept or counter back. Given the status of what is happening next door, we think $1.1 is too high, but still feel somewhere between $1 and $1.1 is fair. Questions: 1. Our agent has told us that one scenario if we counter is that the bank may just reject our offer and then the whole thing will be over meaning we will have to start all over again with the Equator system putting us months back again. Is this true or what is the most likely scenario if we counter? Once we make a counteroffer, does that extinguish their counteroffer or would they just counter back again with $1.1 or something less? We are worried about blowing the whole deal on $50K - $100K. Given that our agent has only done one of these, we need some more expert guidance on what is typical and also worst case scenario. 2. If we agree to BofA's counter, typical length of time for investor approval? Seller believes the loan has gone to multiple investors. We really want the deal to close in August because our children will be starting school in Sept. 3. Is it better to accept the offer, go to the inspection and find things wrong with the house and then counteroffer or is it better to counteroffer now before the inspection? Our agent has told us when we were discussing options last night and different scenarios that we would be in a less risky position if we were to accept the offer, go to the inspection and try to get the price lowered from there as the bank could still say they wouldn't lower the price, but it would still be in our ballpark - in other words, they couldn't put the hammer on the whole deal just based on price and have us start over at that stage. She did say though she felt that they were less inclined to negotiate at the inspection stage. 4. My husband and I are both attorneys and used to doing deals. Typically in a lawsuit, the two sides go back and forth multiple times until they reach a price. A starting price is never the ending price. It is hard for us to imagine that this is not the case with real estate as well, but we have been told that often there is no logic to any of it. How often do investors just decline acceptance? It would seem to us that at this point (5 years after the house has been built and no money all this time) the investors would get what they could and try to reinvest their remaining money somewhere else. Do all of the investors have to agree or how does that work? Is it a good idea to try to find out who the investors are or what is the point of doing that - can the sellers agent find out? Last night our agent said that no one knew who the investors were - I think she was talking about herself and the seller's agent. Thanks much superstars for your assistance! We have had good response thus far from BofA and have good people working for us who mean well, but we really need experts for this property.

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  • Have heard back from the bank that they need to submit our last offer to a "higher level" for approval. This could take up to 10 days for them to approve. It has not in fact gone to the investor yet as we were previously told. She said that they have been working on the liens. My whole response is HUH? Bank of America has been working on the liens? The seller's agent has been working on the liens on this file to our knowledge since February and has gotten the 5 liens (outside of the 2nd) down to about $10k. Does anyone have experience with BofA and having them work on liens on the house? Why would they be doing this? I thought it was the seller's job to do this?

     

    To recap, there is a 2nd for $400K and 5 other liens. They have agreed to accept $22k. BofA is saying they don't know how much needs to be "given" to the 2nd. What does that mean? We were told initially that BofA would only pay $3K towards the 2nd and that it was their policy to not pay more. Anyone have experience with BofA paying more towards a 2nd to get a deal done? Our last offer was $1,060,000 and we were told if we offered that, they would accept it pretty much after their initial counter of $1.1 mil. That was about 5 weeks ago now. The loan is $2.1 mil. Seems crazy that they wouldn't pay the $22K to get the deal done. They will pay more than that in attorney's fees at a foreclosure!

     

    Anyone have any thoughts?

     

    • Carrissa,

      Well the story stops at July 12.  I'm curious after nearly 6 months how this all played out. 

  • Our offer is now with the investor at $1,060,000. We were told through the negotiator that investor would take $1,060 so that's why we offered it in the end.

     

    Offer has been with investor for more than 3 weeks now and we are waiting for approval. Anyone know the average length of time it takes once with the investor to get investor approval? No one can seem to get an answer from BofA as to why it's taking so long. Thanks for any assistance.

  • Update on my short sale for anyone who is interested. Found out more about the liens. There are 6 liens total. One of them is a homeowner's association lien for $4k that was never reduced to judgment so I think that one is no good anymore. One is for $400,000 and is a mechanic's lien. Seller's agent thinks she can get this one reduced to $10K. The rest the sellers agent thinks she can get down to $1,000 so we're looking at $15K to pay in liens.

     

    We made our counteroffer on Fri. of $1,080,000. However, in the meantime, the sellers agent has started to talk to another negotiator working on the file. She sent over a letter explaining the history of the house next door. She had originally had the listing and had a cash offer of $1.2 which the bank rejected. They ended up foreclosing on it and sold it as I said above a few weeks ago after it was foreclosed for $812K. That got the attn. of some other negotiator apparently who is now listening. She explained she didn't think it would get an appraisal of $1,080 and he is now listening and taking it back to the negotiator team. She thinks they are going to come back and take $1mil or a  little less. So we put our counteroffer in not as a formal counteroffer, but just to satisfy the equator system.

     

    She said she expects them to get back to us early next week and then after we are agreed she thinks investor will get back to us within 2 weeks. Keep your fingers crossed for us! Thanks!

  • Update on my short sale! House next door that was foreclosed on as explained above finally closed at $812,500. We counteroffered at $1.025 on Wed. Fri. morning BofA sent back their "counteroffer" which was worse than the original counter. They again countered at $1.1, lowered my agent and seller's agent commissions and lowered the amount they were willing to pay for the liens from $6K to $3K. Seems to me like they are working backward! So much for negotiation. My agent spoke with seller's agent who has an open line of communication with the negotiator. Negotiator is adamant that our offer must come up to $1.080 in order to move it forward to the investor. Why they didn't counter at $1.080 is beyond me. Any ideas?

     

    Also, anyone know how long it typically takes to get investor approval as I think we will be countering as necessary? Thanks!

  • You really need title company to verify if the liens are a condition needing cleared for the title commitment. Not all liens need to be
  • Thanks! My agent is in constant contact with the title people and she has a copy of the title report. She says the seller's agent is on top of it and pretty good at this kind of thing. So I think we're trying as best we can on that. I haven't seen a copy of the title personally, but I'm not a real estate attorney so not sure it would mean much to me.
  • Have you checked title on the house to see which liens or judgements must be cleared. It is possible that some may not need to be. You may need to clear some yourself if push comes to shove
  • What is the benefit of printing out the equatory counteroffer and worksheet and forward to us for review and approval? Thanks!
  • Yes definitely agreed! Just heard back from my agent. New news. Seller's agent spoke with negotiator this morning and he said he thinks investors will take $1,080,000. Sound like that should be our counteroffer?

     

    Also more news on the liens Harry - there are 4 liens and 1 judgment. All told still a lot of money. Sound better?

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