Replies to This Discussion

Permalink Reply by Smitty on July 15, 2011 at 1:29am

Richard, I'm sorry you're going through this, but unfortunately there are NO gaurantees in short sales

 

I've done sales that took 3 months from start to finish and also am still working on one that is going on 18 months.  How bad do you want the house?  You have to ask yourself that.  What is the timeframe you are willing to wait?  If you reach the  max timeframe it may be time to move on.  The banks don't HAVE to even agree to a short sale and in more than one case I've seen them opt for a foreclosure over a higher priced short sale offer.  There is NO rhyme or reason.

 

I doubt the listing agent is "scamming" anyone.  I've seen listings go up and down and even done it myself.  I had a listing at $350,000 that I upped to $400,000 to show BOA that there was NO way their valuation was in line with market value.  I wouldn't necessarily recommend it, but in my case it worked.  

 

You have to wait if you want a short sale. Even then, it may never come to fruition.  See if you can ask your agent if the listing agent can update you weekly.   That may ease your mind a bit.  These bank negotiators have HUNDREDS of files on their desk so sometimes you have to really be on top of them to get an answer.

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Permalink Reply by Richard on July 15, 2011 at 4:42am

Smitty,

 

Thanks for the heads up advice.  I gave myself 6 months to ride this thing into the ground.  I knew this would be a tough purchase, however I just figured the local agents would have milestones updates and could at least keep me in the loop, especially after 4 months.  I was hoping that after 4 months that I might be seeing the light at the end of the tunnel, and not a freight train coming at me.

 

I'm one of the lucky ones to be able to have another home to live in while all of this is happening, however interest rates will start to climb again.  As you can see, I'm also giving my agent (my brother) some grief too for not taking a more agressive approach in getting information back to me.

 

Realistically, I'd rather have the two agents work together while the seller and myself stay on the sidelines.  These are supposed to be the two professionals in their fields.  However, there are times when I feel that I know more than the agents.  I know that they can close homes as I've witnessed my agent in action, and the seller's agent professes to be a short sale expert on the company's website, however it seems that the local short sales market here in Tempe, Az has roughed them both up and they seem to be licking their wounds hoping that that they don't get pushed back in the game.  What a tag team they seem to be.............Laurel and Hardy at its best.

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Permalink Reply by Kimberley Kelly on July 15, 2011 at 6:24am

Richard:  Smitty is correct in his descriptions, but you are also correct in assuming that the List Agent should be keeping your Agent updated.  The List Agent is the key to a successful short sale.  There is no way around that.  Good luck!

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Permalink Reply by Richard on July 15, 2011 at 3:56pm

Kimberly and Smitty,

 

Thanks for the support.  Both agents must have read my mind.  The listing agent called me today to tell me that he’s been working hard to get the file escalated and reviewed, however they’ve been giving him the run around.  Supposedly, they are claiming that they needed some other documents were missing from the file, but he assured me that the very documents in question had already been sent to them, so he updated their files this week.  I realize that this is an ongoing realistic concern with all SS agents.  He tells me that what may have got the ball rolling is that the seller finally agreed to miss a payment last month.  From what I've seen in my research, this seems to work pretty regularly.

He's now pushing for the valuation, so that is at least a positive step.  The other positive side of this transaction for now is, he has agreed to keep me updated at least bi-weekly.  So, it looks like the file is now moving. Hopefully in a positive direction.

 

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Permalink Reply by Tracy Hatchell on July 15, 2011 at 5:40pm

I have to tell you that what I am reading here is absurd!!!! No one from the bank should ever tell the seller to NOT make payments before he can be considered for a short sale. I fight with banks all the time about this. I close many shorts sales that the home owner has NEVER missed a payment. That is NOT a requirement to qualify for the short sale!!!! We as short sale agents do get the run around from most banks every day. We are constantly sending and resending documents that we have sent over and over again. I have had shorts sales recently take 40 days to close from teh time I submitted a ratified contract to the short sale bank buit have one that is approve for the HAFA progrma and they have sat on it since 5/3/2011 and finally closing one with BOA that is closing next week after 21 months. You can never ever tell what the bank is going to do and how long it will take them to assign a negotiator. BPO agents screw us  agood bit because they are giving BS elevated values on our listings that we know good and well that they are trying to just get them to add to their REO listings. It is very hard and trying at times but quite rewarding when we can help our sellers get out of that home and prevent them from having a deficiencey judgement from a foreclose. If buyers agent wre more experienced about the process they should do better by prepping the buyer and getting the buyer to understand the process. If a buyer is not wililing to wait it out at least 120 days then they should not be making an offer to begin with. Also, buyer tend to make ridiculous offers at times. I have news for those buyer!!!! the bank is not going to just give you the house!!! Make a legitimate offer!!! It kills me when I have a short sale listed that is worth almost $300,000 and the buyer and their agent send me an offer for $120,000. I have to have assurances that the buyer can obtain a loan for the amount the bank is really wanting before I even start the process because what a waste of time if I already know the bank is going to want at least $210,000 on a house like that. Most of us who do this for a living every day know about what the bank is looking for. Don;t bring me a BS offer and not come up any where close to what you know the house should be sold for. I could have sold it to someone else in the same it takes to negotiate. Too many ding dongs out there advising their buyer clients to do the wrong thing. Please be considerate and know that if the seller's agent is telling you what you are saying he is then it is probably true. Do you actually think we wold be playing games with you??? Yeah, I don;t know about you but sure I want to wait over 6 months or longer for a paycheck!!! RIGHT! Don't think so!!!! If you have patience and wait it out you will get a great deal on a house and be very satified. Good luck to you!!!!  Thanks. Tracy

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Permalink Reply by Richard on July 15, 2011 at 7:20pm

Hi Tracy,

 

Thank you for chiming in on the discussion.  What I mentioned in my notes above is true.  To give you an idea of my search and pricing on this home, I did my homework and did it well to the point of not overriding the authority and professional opinions of both of the agents involved.  Prior to making an offer on this home, I did a very extensive study on 38 very similar homes sold within a 1 1/2 mile radius of this home, with similar living footage, upgrades, amenities, similar neighborhoods, lot sizes, age, etc.  It was more in-depth than your normal CMA.  It covered a host of criteria.  I actually graded out over 100 listings in that area, but settled on the 38 sales over a 6 month period due to criteria, economic conditions and price changes.  I only looked in one zip code.  I made it a point to at least personally view about 70% of the interior and exterior of the 38 homes at the very least.  I currently live within 2 miles of these homes.

 

Of the 38 homes, the average price sold for those homes were within 3% of what I offered on my short sale.  There are 3 other very similar short sale homes located in the same neighborhood and with 1/8 of a mile from this home that listed within 1 month of my short sale.  They all closed at the end of June.  My price offering is just slightly above the average for those homes as well.  My offer was far from a low ball offer.  Furthermore, the home I offered on will require some kitchen upgrades, driveway and landscape revisions, and noise abatement since it is located next to a semi-arterial street.  I made the seller's agent aware of my intentions and the costs involved.  However, even without this added work, my offer was more than reasonable.  I offered on the home because it has potential, is located near great shopping, major universities, in a great neighborhood and I can make these revisions myself.

 

I just know that I'm not the only one in this site that has read of sellers being told to miss a payment in order to get the lender's attention.  I was told upfront by the seller's agents that the seller had not missed a payment and that they needed to get the lender's approval for the short sale.  Additionally, because of the seller's job situation and divorced status, gaining approval should not be an issue.  However, the lender is Charles Schwab and the seller have a 1st and 2nd mortgage with them.  That was over 4 months ago.  Also, I was also told by the same agents that they would be asking for my ernest money very shortly (within a few weeks).  Please keep in mind, I had furnished 2 seperate (only needed one) lending approvals upfront from Wells Fargo and Chase.  I gave them everything requested of me at the start. I didn't ask for any extras, just to show them I was on board, in addition to giving them my word that I would ride it out. I've been keeping my end of the bargain.

 

If you notice in my notes above, most of my beef has been not getting updates from my agent because he can't get them from the listing agent.  I'm a professional engineer and I'm not afforded the luxury of ignoring my clients.  We are required to be responsive, even if the update shows that the status has not changed.  It's a business and professionalism thing.  In the business world, time is money.

 

Confidentially, I've set 6 months for approval and, the seller's agents told me upfront that it may take a few months.  I'm fine with that as long as I'm in the communication loop, but 21 months as you mentioned in your note above for a home is certainly out of the question for me.  I may be wrong, but I think I can get this house if the players are serious about it.

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Permalink Reply by Richard on July 16, 2011 at 2:26pm

Hi Brian,

 

That's a very good point.  I was told that this sell is a post divorce sale, so Charles Schwab could very well be looking in several areas for money.  And I've read or heard on several occasions where the missing payment approach has been used.  I couldn't reccomend that to anyone as I know that their credit will be impacted and I'm not the realtor, however the practice does exist.  On another note, the seller agent did say by phone that he updated the lender's file with new bank statements and W-2s this week.

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Permalink Reply by Eric Mieles on July 17, 2011 at 2:49am

I guess the old adage of "'Engineers are analytical" is not true!!

lol jk, My thoughts are if we had more buyers who took this as serious as you and spent time educating themselves with value, lenders, loans and ss we would have a much better overall market and more importantly setting us up for future success with american home ownership!

Richard said:

Hi Tracy,

 

Thank you for chiming in on the discussion.  What I mentioned in my notes above is true.  To give you an idea of my search and pricing on this home, I did my homework and did it well to the point of not overriding the authority and professional opinions of both of the agents involved.  Prior to making an offer on this home, I did a very extensive study on 38 very similar homes sold within a 1 1/2 mile radius of this home, with similar living footage, upgrades, amenities, similar neighborhoods, lot sizes, age, etc.  It was more in-depth than your normal CMA.  It covered a host of criteria.  I actually graded out over 100 listings in that area, but settled on the 38 sales over a 6 month period due to criteria, economic conditions and price changes.  I only looked in one zip code.  I made it a point to at least personally view about 70% of the interior and exterior of the 38 homes at the very least.  I currently live within 2 miles of these homes.

 

Of the 38 homes, the average price sold for those homes were within 3% of what I offered on my short sale.  There are 3 other very similar short sale homes located in the same neighborhood and with 1/8 of a mile from this home that listed within 1 month of my short sale.  They all closed at the end of June.  My price offering is just slightly above the average for those homes as well.  My offer was far from a low ball offer.  Furthermore, the home I offered on will require some kitchen upgrades, driveway and landscape revisions, and noise abatement since it is located next to a semi-arterial street.  I made the seller's agent aware of my intentions and the costs involved.  However, even without this added work, my offer was more than reasonable.  I offered on the home because it has potential, is located near great shopping, major universities, in a great neighborhood and I can make these revisions myself.

 

I just know that I'm not the only one in this site that has read of sellers being told to miss a payment in order to get the lender's attention.  I was told upfront by the seller's agents that the seller had not missed a payment and that they needed to get the lender's approval for the short sale.  Additionally, because of the seller's job situation and divorced status, gaining approval should not be an issue.  However, the lender is Charles Schwab and the seller have a 1st and 2nd mortgage with them.  That was over 4 months ago.  Also, I was also told by the same agents that they would be asking for my ernest money very shortly (within a few weeks).  Please keep in mind, I had furnished 2 seperate (only needed one) lending approvals upfront from Wells Fargo and Chase.  I gave them everything requested of me at the start. I didn't ask for any extras, just to show them I was on board, in addition to giving them my word that I would ride it out. I've been keeping my end of the bargain.

 

If you notice in my notes above, most of my beef has been not getting updates from my agent because he can't get them from the listing agent.  I'm a professional engineer and I'm not afforded the luxury of ignoring my clients.  We are required to be responsive, even if the update shows that the status has not changed.  It's a business and professionalism thing.  In the business world, time is money.

 

Confidentially, I've set 6 months for approval and, the seller's agents told me upfront that it may take a few months.  I'm fine with that as long as I'm in the communication loop, but 21 months as you mentioned in your note above for a home is certainly out of the question for me.  I may be wrong, but I think I can get this house if the players are serious about it.

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Permalink Reply by Thom Colby CA Brkr 888-391-5245 on July 17, 2011 at 2:55am

Richard,

 

I'm confused about one point in your initial post: 

"The seller agent has told my agent that the owner plans to carry the 2nd with them if allowed and that they needed to get lender approval."

What's that about ??  Are you saying that the Seller is planning to maintain the 2nd and not have it released at close of escrow?  If so, that lien could remain on the property - stay away from that situation !!

 

Good luck !

 

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Permalink Reply by Richard on July 17, 2011 at 6:25am

Hi Thom,

 

Thanks for mentioning the 2nd mortgage issue.  That is indeed critical!!  My understanding per conversations with both of the seller's co-agents (man/woman team) was that the seller was requesting of Charles Schwab that she continue to carry the 2nd seperately from and, after this transaction.

 

I don't know if this is possible or, if Charles Schwab will go along with it.  To complicate matters more, this short sale comes less than a couple of years after a divorce settlement, so Schwab may be inclined to try and get money from both parties if possible.  The wife is the only person on the contract as the owner.

 

This is why it is critical for me to be somewhat involved in the communication loop of this transaction, because if Charles Schwab is not buying the story within my 6 month waiting period, there is no need for me to stick around.  However, if Charles Schwab are going to completely release this property for a short sale transaction, then I'm incline to play ball.  I know people talk about trust and patience in the short sale transactions, however without documented written updates, what do a buyer have to go on?

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Permalink Reply by Richard on July 17, 2011 at 7:06am

Thanks for the kind words Eric!!  My viewpoint is, why waste my agent's time and gas in this economy looking at properties that are not a good fit for me when I can easily save us both time and money researching ahead of time.  I've seen some buyers waste agents effort when they are not sure of what they want, that's not fair.

Eric Mieles said:

I guess the old adage of "'Engineers are analytical" is not true!!

lol jk, My thoughts are if we had more buyers who took this as serious as you and spent time educating themselves with value, lenders, loans and ss we would have a much better overall market and more importantly setting us up for future success with american home ownership!

Richard said:

Hi Tracy,

 

Thank you for chiming in on the discussion.  What I mentioned in my notes above is true.  To give you an idea of my search and pricing on this home, I did my homework and did it well to the point of not overriding the authority and professional opinions of both of the agents involved.  Prior to making an offer on this home, I did a very extensive study on 38 very similar homes sold within a 1 1/2 mile radius of this home, with similar living footage, upgrades, amenities, similar neighborhoods, lot sizes, age, etc.  It was more in-depth than your normal CMA.  It covered a host of criteria.  I actually graded out over 100 listings in that area, but settled on the 38 sales over a 6 month period due to criteria, economic conditions and price changes.  I only looked in one zip code.  I made it a point to at least personally view about 70% of the interior and exterior of the 38 homes at the very least.  I currently live within 2 miles of these homes.

 

Of the 38 homes, the average price sold for those homes were within 3% of what I offered on my short sale.  There are 3 other very similar short sale homes located in the same neighborhood and with 1/8 of a mile from this home that listed within 1 month of my short sale.  They all closed at the end of June.  My price offering is just slightly above the average for those homes as well.  My offer was far from a low ball offer.  Furthermore, the home I offered on will require some kitchen upgrades, driveway and landscape revisions, and noise abatement since it is located next to a semi-arterial street.  I made the seller's agent aware of my intentions and the costs involved.  However, even without this added work, my offer was more than reasonable.  I offered on the home because it has potential, is located near great shopping, major universities, in a great neighborhood and I can make these revisions myself.

 

I just know that I'm not the only one in this site that has read of sellers being told to miss a payment in order to get the lender's attention.  I was told upfront by the seller's agents that the seller had not missed a payment and that they needed to get the lender's approval for the short sale.  Additionally, because of the seller's job situation and divorced status, gaining approval should not be an issue.  However, the lender is Charles Schwab and the seller have a 1st and 2nd mortgage with them.  That was over 4 months ago.  Also, I was also told by the same agents that they would be asking for my ernest money very shortly (within a few weeks).  Please keep in mind, I had furnished 2 seperate (only needed one) lending approvals upfront from Wells Fargo and Chase.  I gave them everything requested of me at the start. I didn't ask for any extras, just to show them I was on board, in addition to giving them my word that I would ride it out. I've been keeping my end of the bargain.

 

If you notice in my notes above, most of my beef has been not getting updates from my agent because he can't get them from the listing agent.  I'm a professional engineer and I'm not afforded the luxury of ignoring my clients.  We are required to be responsive, even if the update shows that the status has not changed.  It's a business and professionalism thing.  In the business world, time is money.

 

Confidentially, I've set 6 months for approval and, the seller's agents told me upfront that it may take a few months.  I'm fine with that as long as I'm in the communication loop, but 21 months as you mentioned in your note above for a home is certainly out of the question for me.  I may be wrong, but I think I can get this house if the players are serious about it.

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Permalink Reply by Tracy Hatchell on July 17, 2011 at 7:37am

Hi Richard,

I have been doing short sales for 8 long years. I can tell you the second mortgage is not an issue. A lot of time sthe second will remove the lien from the property in order for it to close and have th eseller sign a note at closing. As long as there is no equity skimming on the first mortgage which is illegal you will be fine. The key is to find out first hand if the second mortgageI bank is in fact going to subordinate the lien. It is not "CRITICAL" as someone else stated before as long as everything is taken care of with the mortgage company.

 

Thanks, Tracy Hatchell

Richard said:

Hi Thom,

 

Thanks for mentioning the 2nd mortgage issue.  That is indeed critical!!  My understanding per conversations with both of the seller's co-agents (man/woman team) was that the seller was requesting of Charles Schwab that she continue to carry the 2nd seperately from and, after this transaction.

 

I don't know if this is possible or, if Charles Schwab will go along with it.  To complicate matters more, this short sale comes less than a couple of years after a divorce settlement, so Schwab may be inclined to try and get money from both parties if possible.  The wife is the only person on the contract as the owner.

 

This is why it is critical for me to be somewhat involved in the communication loop of this transaction, because if Charles Schwab is not buying the story within my 6 month waiting period, there is no need for me to stick around.  However, if Charles Schwab are going to completely release this property for a short sale transaction, then I'm incline to play ball.  I know people talk about trust and patience in the short sale transactions, however without documented written updates, what do a buyer have to go on?

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