BoA Accepted Purchse price and counter offered closing costs - We accepted their Counter Offer - then, they came back and countered on the Purchase Price! What the heck?!
I am the buyer. Both the seller's agent and my agent are well versed in Short Sales. We submitted an offer in January for $207K on a house with $9K in closing costs. Based on the comps, this offer was realistic. BoA came back two weeks ago and accepted our offer but counter offered the closing costs and said they would pay 3.5% only. We accepted their counter and were waiting for the letter of acceptance. Then, 9 days after accepting their counter - they counter offered the purchase price and want $12K more than our offer. Plus, there are NO COMPS to support this.
Can they legally do this?
Apparently, a new negotiator was assigned to the case and she is trying to get more money. The seller's agent has given her documentation of the previous counter offer (email) but since we haven't received the acceptance letter, it isn't "on paper".
As a buyer, I am prepared to walk and will not meet their demands for $12k more.
Anyone else in this situation?
Replies to This Discussion
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Permalink Reply by kathleen shaffer on
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sounds pretty typical. just have your agent treat them like she would any other seller.
Counter and walk away if you need to.
We should not treat these bankers/lenders/investors any different that we would any other seller.
stand firm and if your offer is good.....stick to it. -
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Permalink Reply by Emily S. Knell on
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3.5% is great for getting them to pay closing costs, usually it's no more than 3%. Are they asking for a $12K cash contribution from either you or the seller or do they want to increase the purchase price $12K.
BofA are idiots. If you strongly feel and have the proof that the property is not worth $12K more, you could accept their deal, get in writing and then get your own appraisal. BofA will have to come down in price if your own appraisal doesn't come in. BofA will have to sell it for Fair Market Value.
Have the buyer's agent send in a BPO or have them pay for an independent BPO and send that in to your negotiator.
Another extra step is for you to get pre-approved with Bank of America for your loan and you pay for an appraisal to be done through Bank of America,,, turn that appraisal report over to your agent and the negotiator. This means you would need to invest $400-450 for an appraisal. -
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Permalink Reply by S.A. on
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Oh, it's like bait and switch!
I'm a buyer, too, and I am afraid of the same thing to happen to me! I've been very firm and clear to my agent that I would walk even if the countered price is $10. My lender (BoA) got appraisal which came in at $250k (exactly the $$ I offered); good thing my lender waived appraisal fee since the short sale bank is also BoA. With the money I didn't have to spend, I went ahead and ordered inspections, and it appears that I will have to pay quite a bit of repair costs: all electric, plumbing and hvac are improperly done DIY by the seller that need to be fixed, and the roof needs to be replaced. What's more, the house has termite damages, which was known to the seller prior to the listing. Before I put in my offer, the listing agent told me that she'd addressed the termite issue in the SS package and initiated negotiation with the lender to pay for the treatment and repairs (fingers crossed but in fact, BoA ordered and paid for the pest control inspection!)
Besides, I am getting estimates on necessary repairs tomorrow to avoid a heart attack at closing; I'm anxious to find out how much the total will become. If the estimate of repair comes in high and BoA (Seller's side) counters again for any extra $$ from me, I am so willing to walk.
At this time, according to both listing/my agents, bank has countered, but listing agent told my agent that there was nothing for me to do at the time. It appears that the listing agent countered back to BoA on behalf of seller (don't know what it was). We are currently waiting to hear back from BoA. I hope they won't close the file or counter to make me come up with extra $$!
My question - would the inspection report and repair estimates help to combat the counter offer, if that ever comes? -
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Permalink Reply by Bryant Tutas on
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S.A., Yes you can certainly use repair estimates to negotiate with. If the repairs are extensive it affects the value of the property.
Usually the first counter offer from BofA is still subject to approval by the investor and/or mortgage insurance company. So even though you accept the counter it is not final. Until you get an actual written approval either party can still negotiate. There is nothing illegal or underhanded with this at all. It's called negotiating a short sale . Having said that it can certainly be frustrating. Just remember the lenders/servicers have ZERO emotions in the game. It's all about the money. This gives them an advantage. -
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Permalink Reply by Alan Remigio on
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Melody,
My company has been trending BofA for a while. We are very well aware that there is a constant attempt to boost seemingly settled negotiations. For everyone out there, the tactics to get more $$ seems to be more prevalent. What you need to know is a little contract law. This is Texas Hold 'em and most here are just laying their cards face up on the table for lenders like BofA to exploit. Now you come to this excellent site for advice on a problem in progress as opposed to coming to this site for ideas on PLANNING your short sale before you commit to an offer.
I also have to say this...listing agents, you do your seller no favors by holding out for the best price. When the seller package is sent in, you must show the lender that your seller cannot afford anything after his net income pays the bills. when you create a negative picture supporting the need for a short sale you will have a much easier time handling seller contribution (if it ever comes up) and any other items lenders are throwing in. Your seller package is profiled and measured against their metrics, this is why you get the seller contribution. There is a need to be consistent throughout the process otherwise you will be blindsided by ridiculous lender requests. When you bow to these requests, however small, guess what...more to come. I've said it before...listing agents, you have a duty to advocate for your seller, NOT THE LENDER! Until you take this to heart you will have the ups and downs you are now experiencing.
Addressing the closing cost issues, I've never once had to pay closing costs, as a buyer in a short sale. I suspect something in the negotiating process triggered it.
As a negotiator, I know that my initial offer has to be low, with supporting data, yes. lower even than the initial list price. I am seeing many on this site agreeing to asking price or better. If you think BofA or any other lender does not have a negotiating model for asking price, think again. They are one of the few who are managing the foreclosure process for a profit. Many of you understand the pricing guidelines of the GSE's. Unfortunately, few use these guidelines to1) get the best price possible, and 2) force lenders like BofA to work within the guidelines of their investors. If one understands contract law, they will also understand when to apply the law card to move files through. You are allowing the lender to negotiate in bad faith and letting them get away with it. By the way, if escalating does not do any good, try calling the legal department...trust me...you will get a quick response 100% of the time.
Ideal scenario is listing agent contracts with seller and puts a price out. Buyer's agent, with supporting data and client willing to wait the required time, discusses the value, come to an agreement and puts the property under contract with the normal down payment. Offer is now sent in and negotiation starts. Buyer must request an appraisal done by lender and not a BPO. When negotiations are done and a gross price is emailed to the negotiator, depending on the appropriate GSE the negotiator applies the net and works the closing costs. In my world and I suspect Kent's as well as Ben's, and others, my gross price is LESS than the initial offer, AND ACCEPTED, as long as my net is in line with the investor guidelines. Of course there is more to this entire process and items have to be negotiated away during the process.
Agents, this is a new way of viewing an old process. If both sides can eliminate the customary adversarial role in the short sale process and turn your energies as a team toward the lender to get the deal done, I suspect you will have a lot more success than before be more efficient with your time and be able to have more time to market for short sales. And, yes, this is how I do short sales with agents, in fact, the only way. Sorry to take up a lot of space...I am totally convinced that, as the lenders evolve in this area so must we. I'm off my soapbox... -
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Alan, I completely agree with you. As a buyer, at what point do you bring in a lawyer? Our seller's agent is working on this diligently, however, he is not well experienced with this process. BOA asked us for our financial records after we were already pre-qualified by BOA. Talk about seeing all your cards! I wish now that we did not provide any additional information. We do want the house. Can a real estate attorney help us at this point or are we forced to play the game with BOA? You obviously know what you are talking about and would appreciate any help. Is there a negotiator "for hire" to help buyers get the deal done?
Alan Remigio said:Melody,
My company has been trending BofA for a while. We are very well aware that there is a constant attempt to boost seemingly settled negotiations. For everyone out there, the tactics to get more $$ seems to be more prevalent. What you need to know is a little contract law. This is Texas Hold 'em and most here are just laying their cards face up on the table for lenders like BofA to exploit. Now you come to this excellent site for advice on a problem in progress as opposed to coming to this site for ideas on PLANNING your short sale before you commit to an offer.
I also have to say this...listing agents, you do your seller no favors by holding out for the best price. When the seller package is sent in, you must show the lender that your seller cannot afford anything after his net income pays the bills. when you create a negative picture supporting the need for a short sale you will have a much easier time handling seller contribution (if it ever comes up) and any other items lenders are throwing in. Your seller package is profiled and measured against their metrics, this is why you get the seller contribution. There is a need to be consistent throughout the process otherwise you will be blindsided by ridiculous lender requests. When you bow to these requests, however small, guess what...more to come. I've said it before...listing agents, you have a duty to advocate for your seller, NOT THE LENDER! Until you take this to heart you will have the ups and downs you are now experiencing.
Addressing the closing cost issues, I've never once had to pay closing costs, as a buyer in a short sale. I suspect something in the negotiating process triggered it.
As a negotiator, I know that my initial offer has to be low, with supporting data, yes. lower even than the initial list price. I am seeing many on this site agreeing to asking price or better. If you think BofA or any other lender does not have a negotiating model for asking price, think again. They are one of the few who are managing the foreclosure process for a profit. Many of you understand the pricing guidelines of the GSE's. Unfortunately, few use these guidelines to1) get the best price possible, and 2) force lenders like BofA to work within the guidelines of their investors. If one understands contract law, they will also understand when to apply the law card to move files through. You are allowing the lender to negotiate in bad faith and letting them get away with it. By the way, if escalating does not do any good, try calling the legal department...trust me...you will get a quick response 100% of the time.
Ideal scenario is listing agent contracts with seller and puts a price out. Buyer's agent, with supporting data and client willing to wait the required time, discusses the value, come to an agreement and puts the property under contract with the normal down payment. Offer is now sent in and negotiation starts. Buyer must request an appraisal done by lender and not a BPO. When negotiations are done and a gross price is emailed to the negotiator, depending on the appropriate GSE the negotiator applies the net and works the closing costs. In my world and I suspect Kent's as well as Ben's, and others, my gross price is LESS than the initial offer, AND ACCEPTED, as long as my net is in line with the investor guidelines. Of course there is more to this entire process and items have to be negotiated away during the process.
Agents, this is a new way of viewing an old process. If both sides can eliminate the customary adversarial role in the short sale process and turn your energies as a team toward the lender to get the deal done, I suspect you will have a lot more success than before be more efficient with your time and be able to have more time to market for short sales. And, yes, this is how I do short sales with agents, in fact, the only way. Sorry to take up a lot of space...I am totally convinced that, as the lenders evolve in this area so must we. I'm off my soapbox... -
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Well, posting this seemed to be good luck. We had our offer accepted...finally! Let's hope we get an acceptance letter.
Amy Prysock said:Alan, I completely agree with you. As a buyer, at what point do you bring in a lawyer? Our seller's agent is working on this diligently, however, he is not well experienced with this process. BOA asked us for our financial records after we were already pre-qualified by BOA. Talk about seeing all your cards! I wish now that we did not provide any additional information. We do want the house. Can a real estate attorney help us at this point or are we forced to play the game with BOA? You obviously know what you are talking about and would appreciate any help. Is there a negotiator "for hire" to help buyers get the deal done?
Alan Remigio said:Melody,
My company has been trending BofA for a while. We are very well aware that there is a constant attempt to boost seemingly settled negotiations. For everyone out there, the tactics to get more $$ seems to be more prevalent. What you need to know is a little contract law. This is Texas Hold 'em and most here are just laying their cards face up on the table for lenders like BofA to exploit. Now you come to this excellent site for advice on a problem in progress as opposed to coming to this site for ideas on PLANNING your short sale before you commit to an offer.
I also have to say this...listing agents, you do your seller no favors by holding out for the best price. When the seller package is sent in, you must show the lender that your seller cannot afford anything after his net income pays the bills. when you create a negative picture supporting the need for a short sale you will have a much easier time handling seller contribution (if it ever comes up) and any other items lenders are throwing in. Your seller package is profiled and measured against their metrics, this is why you get the seller contribution. There is a need to be consistent throughout the process otherwise you will be blindsided by ridiculous lender requests. When you bow to these requests, however small, guess what...more to come. I've said it before...listing agents, you have a duty to advocate for your seller, NOT THE LENDER! Until you take this to heart you will have the ups and downs you are now experiencing.
Addressing the closing cost issues, I've never once had to pay closing costs, as a buyer in a short sale. I suspect something in the negotiating process triggered it.
As a negotiator, I know that my initial offer has to be low, with supporting data, yes. lower even than the initial list price. I am seeing many on this site agreeing to asking price or better. If you think BofA or any other lender does not have a negotiating model for asking price, think again. They are one of the few who are managing the foreclosure process for a profit. Many of you understand the pricing guidelines of the GSE's. Unfortunately, few use these guidelines to1) get the best price possible, and 2) force lenders like BofA to work within the guidelines of their investors. If one understands contract law, they will also understand when to apply the law card to move files through. You are allowing the lender to negotiate in bad faith and letting them get away with it. By the way, if escalating does not do any good, try calling the legal department...trust me...you will get a quick response 100% of the time.
Ideal scenario is listing agent contracts with seller and puts a price out. Buyer's agent, with supporting data and client willing to wait the required time, discusses the value, come to an agreement and puts the property under contract with the normal down payment. Offer is now sent in and negotiation starts. Buyer must request an appraisal done by lender and not a BPO. When negotiations are done and a gross price is emailed to the negotiator, depending on the appropriate GSE the negotiator applies the net and works the closing costs. In my world and I suspect Kent's as well as Ben's, and others, my gross price is LESS than the initial offer, AND ACCEPTED, as long as my net is in line with the investor guidelines. Of course there is more to this entire process and items have to be negotiated away during the process.
Agents, this is a new way of viewing an old process. If both sides can eliminate the customary adversarial role in the short sale process and turn your energies as a team toward the lender to get the deal done, I suspect you will have a lot more success than before be more efficient with your time and be able to have more time to market for short sales. And, yes, this is how I do short sales with agents, in fact, the only way. Sorry to take up a lot of space...I am totally convinced that, as the lenders evolve in this area so must we. I'm off my soapbox... -
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Permalink Reply by Mark on
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It isn't over until it is over.
Word or caution, they can still come back even after you both agree and counter again. I finally pulled the plug on a two month fiasco. After no action for 50 days they finally countered 55K above our offer (one that I still feel is FMV). I countered 10k above my initial offer, they countered 5 more and I agreed. I also asked them if it didn't appraise at that price would they renegotiate. Yes, of course they said. I sent in a new addendum for the agreed upon price and a week later they countered 15k above that price.
Bye bye BOA, good luck with your forclosure. Maybe I can buy it then for about 20k less than my original offer!! -
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Thank you for the warning! I won't start packing. Still no approval letter. Negotiator is waiting manager approval. I hope you can get the house you want, that would be great! Maybe I should consider the same. Good Luck!
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Best of luck to you too. I am closing on another house in 30 days (NOT a BOA short sale). I will be curious to ultimately see what the home I wanted sells for. I am guessing about 30K less than what I was offering when it becomes a bank owned property....
Amy Prysock said:Thank you for the warning! I won't start packing. Still no approval letter. Negotiator is waiting manager approval. I hope you can get the house you want, that would be great! Maybe I should consider the same. Good Luck! -
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Permalink Reply by Kimberley Kelly on
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Walk. Buyers and their agents can only fight so much. I am the List Agent for a Short Sale in Indio, CA, and am on my 3rd counter with B of A with a fabulous Buyer such as yourself. We are $2,000 apart and I would bet my last dollar, B of A, will NOT negotiate. My Buyers will not increase their offer any more, nor should they as comps do not support it. My Sellers have already come up with a good sized nut to get the Short done, raised it each time..no more. Both Buyer and Seller are ready to walk..over $2,000. Seems small, but B of A keeps coming back each time with a few thousand more..a few thousand more. Get over it! Make your counter, be reasonable, and get the property gone! There is nothing reasonable about these Lenders..do not fall in love with a Short Sale property..unless it is Wachovia. They do get it done quickly.
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Permalink Reply by Claudia Carignan on
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Emily - I sent in an appraisal and BoA told me that tha apraiser is not one of their authorized appraiser so they will not reduce the price from $70K to what it appraises for $65K and the offer is for $65K
Emily S. Knell said:3.5% is great for getting them to pay closing costs, usually it's no more than 3%. Are they asking for a $12K cash contribution from either you or the seller or do they want to increase the purchase price $12K.
BofA are idiots. If you strongly feel and have the proof that the property is not worth $12K more, you could accept their deal, get in writing and then get your own appraisal. BofA will have to come down in price if your own appraisal doesn't come in. BofA will have to sell it for Fair Market Value.
Have the buyer's agent send in a BPO or have them pay for an independent BPO and send that in to your negotiator.
Another extra step is for you to get pre-approved with Bank of America for your loan and you pay for an appraisal to be done through Bank of America,,, turn that appraisal report over to your agent and the negotiator. This means you would need to invest $400-450 for an appraisal. -
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