If you need help with a short sale, holler we are getting pretty good at them!We just closed a Country Wide Short Sale! What a long, winding road. The property has been under contract for close to 7 months and the buyer stayed on board even after CW delayed 2 months for a letter that said to proceed to the closing. I have learned the hard way why some of these banks are in trouble. The buyers can't really buy the properties! Anyway, just patting my own back. If you need help with a short sale, holler we are getting pretty good at them!
If you need help with a short sale, holler we are getting pretty good at them!Replies
82Beach Lover
Sales price vs. list price
Think the "general rules" are all over the place but will share my experience with you since you are
particularly interested in the sales price vs. list price question. We bought a short sale in SoWal
earlier this year. Suntrust I believe was the sellers bank/note holder. Put in an offer for the full asking
price which actually seemed like a good deal plus we loved the house and figured there were other offers on it. Had an appraisal done a month later....hadn't heard anything at all from the seller's lender/realtor and were
considering withdrawing our offer. Our realtor encouraged us to reduce our offer after the appraisal
by 50 thou. So we did. And figured that would be it. Even started looking at other houses. Really no
communication to speak of during this time between us and the seller's realtor/sellers lender.
Then a few weeks after reducing our offer we got a closing date and the seller's lender REDUCED
the price by an additional 25 thou! Pretty weird deal but we were thrilled and the house is great
and our realtor did a terrific job.
So we ended up with a sales price 75 thou lower than the original asking price. I am sure this is not
common and I'm really not sure how it all worked out that way......
Took about 8 weeks from offer to closing.
Any science around what the ultimate sales price is looking like compared to the list price. Curious if there's a good reason to wait around 7 months. Any general rules emerging in the market?
Think the "general rules" are all over the place but will share my experience with you since you are
particularly interested in the sales price vs. list price question. We bought a short sale in SoWal
earlier this year. Suntrust I believe was the sellers bank/note holder. Put in an offer for the full asking
price which actually seemed like a good deal plus we loved the house and figured there were other offers on it. Had an appraisal done a month later....hadn't heard anything at all from the seller's lender/realtor and were
considering withdrawing our offer. Our realtor encouraged us to reduce our offer after the appraisal
by 50 thou. So we did. And figured that would be it. Even started looking at other houses. Really no
communication to speak of during this time between us and the seller's realtor/sellers lender.
Then a few weeks after reducing our offer we got a closing date and the seller's lender REDUCED
the price by an additional 25 thou! Pretty weird deal but we were thrilled and the house is great
and our realtor did a terrific job.
So we ended up with a sales price 75 thou lower than the original asking price. I am sure this is not
common and I'm really not sure how it all worked out that way......
Took about 8 weeks from offer to closing.
SoWal Insider
So we ended up with a sales price 75 thou lower than the original asking price. I am sure this is not
common and I'm really not sure how it all worked out that way......
Took about 8 weeks from offer to closing.
How long did the sellers own the home and what was the difference between their "asking" price of the house and the price they originally paid?
.
Beach FanaticAuthor
I have closed several short sales this year and have had some very happy buyers. The secret to closing a short sale is the buyer staying on board for as long as it takes. I think if worked properly any property can be closed. Every time we lose one it is because the buyer can't handle the waiting game. Now when I am putting a deal together I make sure the buyer is committed to the wait. One positive note on a buyer pull out is at least you get to know what the bank will take. I really have no problems doing short sales. I am grateful for any closing. Put enough deals (ordeals) in the pending drawer and somethings bound to close!
Beach Lover
I will look positively on deals with Regions, thanks Bobby. My short sale woes include Countrywide, Indie Mac, Wachovia and Wells Fargo.
Beach FanaticAuthor
I will look positively on deals with Regions, thanks Bobby. My short sale woes include Countrywide, Indie Mac, Wachovia and Wells Fargo.
Thanks for the heads up on Indie Mac. Working on one right now! Wells is a nightmare. The foreclosure deptartment works faster then the short sale! They don't communicate with each other at all and will fall right into a foreclosure with an offer on the table! The seller then leaves the home and typically is pretty pissed and strips it of anything of value and shuts the power off. The home sits and plummets far below the offer that was on the table. I think we have figured out how to keep that from happening with Wells now.
Beach Lover
How long did the sellers own the home and what was the difference between their "asking" price of the house and the price they originally paid?
.
They bought in 2005 and the property appraiser info I got online earlier this year was a little confusing to me. I couldn't tell if the amount shown was for the property alone (I think it was)
which was 75 thou more than our 2008 price. So I really don't know how much they had into
the house....just the property. The house was built in 2005.
So they bought and built in 2005 and had it for three years. Previous land owner bought it in
2003. No records prior to that. One of the previous "posters" suggested checking the online
site for the Walton County property appraiser prior to buying a short sale (or any sale),
I did this for all the houses we looked at and it really gives you a good starting point in regards
to what the seller needs from the sale. But you probably already know that.
My daughter works for a real estate agency as the Director of Foreclosures ....they just got a
contract for 27,000 homes across the nation...its crazy. Not so many short sales though. As
previously stated in other posts, buyers and banks have less patience for this. But when it all
comes together, as it did for us, its a great opportunity,
Beach FanaticAuthor
Here is a good example: I just got a call on a home on Birch Street that is a short sale. We have had an offer on the table that just pulled out. The bank has approved the sale. The home is or was listed for $280,000. The bank will take $220,000! Now I need a buyer and I know what the bank will take and I have a direct line of who to talk with.
So.... Anyone interested in a little 2br 2bath cottage a couple of blocks from the beach for $220,000! I would imagine we will wrap this up quick!
So.... Anyone interested in a little 2br 2bath cottage a couple of blocks from the beach for $220,000! I would imagine we will wrap this up quick!
Beach Lover
My daughter reports that Country Wide is "God Awful"....she handles about 200 to 250 emails
a day regarding foreclosure stuff. Said there's a really high turnover of assest managers there
(at CW)...too much stuff thrown at them and understaffed. In regards to short sales, she
said her office has staff whose sole jobs are (1) packager, (3) negotiators and (4) assest managers
so the individual realtor doesn't have to do it all. This is an office whose main source of income is
short sales and foreclosures though...different from ya'll. They also have a "contact person"
at several of the lending companies....a single negotiator they deal with for all the foreclosures and short sales to speed things along. Her company takes listings from realtors all over and act
as negotiators in the foreclosure/short sale stuff and split the commisions. Said the time line with
Country Wide is about 3 to 5 months for them so 7 months for you (Bobby J I think?) was
pretty darn good! Congrats on that
a day regarding foreclosure stuff. Said there's a really high turnover of assest managers there
(at CW)...too much stuff thrown at them and understaffed. In regards to short sales, she
said her office has staff whose sole jobs are (1) packager, (3) negotiators and (4) assest managers
so the individual realtor doesn't have to do it all. This is an office whose main source of income is
short sales and foreclosures though...different from ya'll. They also have a "contact person"
at several of the lending companies....a single negotiator they deal with for all the foreclosures and short sales to speed things along. Her company takes listings from realtors all over and act
as negotiators in the foreclosure/short sale stuff and split the commisions. Said the time line with
Country Wide is about 3 to 5 months for them so 7 months for you (Bobby J I think?) was
pretty darn good! Congrats on that
SoWal Expert
Here is a good example: I just got a call on a home on Birch Street that is a short sale. We have had an offer on the table that just pulled out. The bank has approved the sale. The home is or was listed for $280,000. The bank will take $220,000! Now I need a buyer and I know what the bank will take and I have a direct line of who to talk with.
So.... Anyone interested in a little 2br 2bath cottage a couple of blocks from the beach for $220,000! I would imagine we will wrap this up quick!
Is this the house which I showed to my customer a while back? She is still shopping.
Beach FanaticAuthor
Is this the house which I showed to my customer a while back? She is still shopping.
Yep. It can happen now! Wells is ready to pull the trigger! call me if you want to revisit
Beach FanaticAuthor
Beach Fanatic
It seems the system is slowing shifting responsibility from the owner who created the transaction over to the bank as the responsible party who in turn will be shifting responsibility to a government bail out.
I know the path is not that clear, but I see and hear a lot of grown ups looking to shift responsibility.[/QUOTE
In a nutshell, the seller is saying I want out and it isn't worth what I owe on it. You then put it out there with the note in the mls that an offer may require approval from the lender. Theoretically, the buyer can compare to other comps and determine what he thinks the bottom is and make an offer based on his/her determination. Generaly speaking, this lets the prospective buyer know that its hit bottom. A lot of buyers are looking for some kind of sign to tell them that now's the time. This seems to be the sign they are looking for in many cases. Its not too hard to understand. Banks on the other hand, can not hold an infinite amount of ORE property just because they think they can get more down the road. They have to make a decision based on their loan loss reserves, capital, current income and amount of current income that is being reserved each month for losses, among other things. They also have to factor in future expenses of holding said property, and decide what makes the most sense. The larger well capitalized banks in many cases are saying, f... it, lets get this behind us and start making money again. There is a lot more to it than whether or not AAbsolute thinks its "shady" or not. Its called business. Anyway, kudos to Bobby for working it till the end. I think that's the way its going to be going forward and that's not necessarily a bad thing.
Banned
Thanks for the insight Santiago. It sounds like you know some of the dynamics of the banking business.
I've heard your statement, "It's called business." a couple times from people over the past 10 years. It always means someone is getting hurt financially. That was what I meant a couple days ago when I posted saying, "So it's o.k. if I pummel somebody like a gorilla just because I can and it's legal?"
I'm naive and still trying to get comfortable with causing someone financial harm under the thesis of it's called business.
I've heard your statement, "It's called business." a couple times from people over the past 10 years. It always means someone is getting hurt financially. That was what I meant a couple days ago when I posted saying, "So it's o.k. if I pummel somebody like a gorilla just because I can and it's legal?"
I'm naive and still trying to get comfortable with causing someone financial harm under the thesis of it's called business.
Beach Fanatic
Thanks for the insight Santiago. It sounds like you know some of the dynamics of the banking business.
I've heard your statement, "It's called business." a couple times from people over the past 10 years. It always means someone is getting hurt financially. That was what I meant a couple days ago when I posted saying, "So it's o.k. if I pummel somebody like a gorilla just because I can and it's legal?"
I'm naive and still trying to get comfortable with causing someone financial harm under the thesis of it's called business.
Its not necessarily causing anyone harm if it brings closure to it and the bank is ok with the deal. The bank's are culpable just like the borrowers in many cases. It took a lot of different players to build the house of cards and they/we all will take our lumps. When you see or hear how many banks are walking away for 5 to 600 k on home loans just to get it behind them and not pursuing the debtors, it sheds some light on how rampant the problem is. I think any transaction now, no matter what the price is a good thing and we need lots to get out of the inventory mess. Short sells are a very good vehicle for getting that done.
Banned
Its not necessarily causing anyone harm if it brings closure to it and the bank is ok with the deal. The bank's are culpable just like the borrowers in many cases. It took a lot of different players to build the house of cards and they/we all will take our lumps. When you see or hear how many banks are walking away for 5 to 600 k on home loans just to get it behind them and not pursuing the debtors, it sheds some light on how rampant the problem is. I think any transaction now, no matter what the price is a good thing and we need lots to get out of the inventory mess. Short sells are a very good vehicle for getting that done.
You do understand that average folks who do the right thing, follow the rules, don't parse agreements for advantage, people of high moral character, say the type of person who maybe served their country in one of the big wars are getting hurt in this don't you?
Beach FanaticAuthor
You do understand that average folks who do the right thing, follow the rules, don't parse agreements for advantage, people of high moral character, say the type of person who maybe served their country in one of the big wars are getting hurt in this don't you?
What are you talking about?
SoWal Insider
What are you talking about?
I think he means (albeit in a round-about way) the US taxpayers will be on the hook for any writedowns resulting from the investulator "short sales" --which is essentially correct.
.
Beach FanaticAuthor
I think he means (albeit in a round-about way) the US taxpayers will be on the hook for any writedowns resulting from the investulator "short sales" --which is essentially correct.
.
The US taxpayer seems to always be on the hook. I don't even want to get started on this one.
SoWal Insider
The US taxpayer seems to always be on the hook. I don't even want to get started on this one.
...only now we're more "on the hook" than we were this time last week thanks to Hank & friends.
.
Banned
What are you talking about?
It just might be true that investors bought property on speculation that they would earn money through the eventual sale at a higher price.
It may be true that some of those folks bought more than one property with the same intention.
Further, it might be true that it was better financially for them to look at short sale theories for disposal of the property when the market fell.
It could be true that this caused amplified erosion of property value within communities.
It may be true that some people have legitimate non-investor reasons to sell their property like relocation for work, retirement, etc. and the amplified erosion of value was the proximate cause of their property being worth less than their mortgage amount.
It may be true that some of those people don't walk away from their loan agreement as a moral decision even though they have the mental skill to incorporate a legal strategy that is better financially.
It may be true that the government will inject funds into the finance system to cure problems for financial institutions hurt by the amplified erosion of value.
Beach Lover
Not to pour fuel on a fire here but talking about the taxpayer taking it in the shorts while simultaneously watching the tape on Washington Mutual's stock price (traded below $2 per share this morning) is making me think it was a bad week to quit drinking.
Seeing as misery loves company I thought I might shed some light on a little understood fact...there is no deposit insurance fund. It's as imaginary as the social security "lock box".
Any funds paid by banks in insurance premiums to the FDIC get turned over to the US Treasury and are used to fund the budget.
So what happens when banks go under and people want to be made whole on their insured deposits?
The US Treasury has to borrow the money.
And who pays the interest on this borrowed money?
You and me - the taxpayer. It always come back to the taxpayer.
(sigh)
Seeing as misery loves company I thought I might shed some light on a little understood fact...there is no deposit insurance fund. It's as imaginary as the social security "lock box".
Any funds paid by banks in insurance premiums to the FDIC get turned over to the US Treasury and are used to fund the budget.
So what happens when banks go under and people want to be made whole on their insured deposits?
The US Treasury has to borrow the money.
And who pays the interest on this borrowed money?
You and me - the taxpayer. It always come back to the taxpayer.
(sigh)
SoWal Insider
would you also admit the employees of WAMU, the borrowers, the depositors, and the stockholders are all taxpayers?
Beach Lover
I would agree that employees, borrowers, depositors and stockholders are most likely US taxpayers.
I would also suggest that many US taxpayers who never chose to be employed by, borrow from, save with or invest in WaMu will be left holding the bag.
Privatized profits / socialized risks - it seems to be the way of the world these days.
I would also suggest that many US taxpayers who never chose to be employed by, borrow from, save with or invest in WaMu will be left holding the bag.
Privatized profits / socialized risks - it seems to be the way of the world these days.
SoWal Insider
I would agree that employees, borrowers, depositors and stockholders are most likely US taxpayers.
I would also suggest that many US taxpayers who never chose to be employed by, borrow from, save with or invest in WaMu will be left holding the bag.
Privatized profits / socialized risks - it seems to be the way of the world these days.
I have no problems with the FDIC/taxpayer taking care of the depositors at WAMU up to the guaranteed $100K. The banks pay FDIC for the insurance policies and if the government spents all the proceeds that's not the fault of the depositors.
I did take issue with the FDIC paying the IndyMac depositors 50-cents on the dollar of their deposits over the insured $100K limits
What the hell was up with that??.
SoWal Expert
I did take issue with the FDIC paying the IndyMac depositors 50-cents on the dollar of their deposits over the insured $100K limits
They did WHAT!?!
What part of "insured up to $100K" is pucking open for interpretation! :angry:
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