Short Sale Pricing Discussion - Page 2

Smiling JOe · #**101** 02-09-2009, 10:34 AM

Joe Mammy nailed it. Much of the time for response is up to the seller, who needs to already have up to date financial statements, hardship letter, etc to submit with the offer. Financing pre-approval letter from the buyer is also a plus. The lender will order a BPO or an Appraisal, so it will take longer, unless they already have one from a previous contract on the same property. My last short sale I closed took about 5 months and two contracts with the same buyer and seller, and that seller was well-prepared regarding all of the information they needed to submit.

As Joe Mammy also stated, since we haven't always had a sale type including short sales, we don't have an accurate way to track historical short sale success, but I'd also guess it to be fairly low due to the lenders lack of urgency, and a small pool of buyers who are willing to wait so long.

SHELLY · #**102** 02-09-2009, 11:38 AM

Quote:

Originally Posted by Bobby J

We tend to lose the buyer before the bank can wrap it up. Then the offers get lower and lower until the bank wakes up and decides what they are going to do. I think an interesting number would be how much money (percent) the bank loses from the first offer to the final closing be it another short sale offer or foreclosure.

.....so the banks are pretty much at the same place that the investulators were about 2 years ago.

.

Bobby J · #**103** 02-09-2009, 11:54 AM

Quote:

Originally Posted by SHELLY

.....so the banks are pretty much at the same place that the investulators were about 2 years ago.

.

Yeah. But the investulators don't seem to be getting bailed out...

silvershark · #**104** 02-12-2009, 11:58 PM

Quote:

Originally Posted by Alyoopster

I have a question as a Buyer: I just put in a contract on a "short sale" home. Can anyone tell me the average responce time that they are getting from the lenders?? And what is the sucess rate of them actually closing the deal?? Our offer was more than the listing agent's list price.

I know i need to be patient but geezz....

We bought a short sale this past summer. Took 6 to 7 weeks for the bank approval, our offer was
the asking price. Ended up paying less (than the asking) at closing following the bank's appraisal.
Alot less per the bank's decision. Very weird and not much info throughout the whole timeline.
Obviously we were very happy with the end result despite the stress and unknowns during the
waiting period. Had all our paperwork in order at the time of the offer. Got a great place and are
lovin being part timers in the So Wal community. Hope this helps.

Smiling JOe · #**105** 02-13-2009, 08:26 AM

That is an interesting story, silvershark. Thanks for sharing a new one on me. Banks seem so far removed from this whole process, that I am not too surprised with that story -- I am, but I am not.

AAbsolute · #**106** 02-14-2009, 04:06 PM

Quote:

Originally Posted by silvershark

We bought a short sale this past summer. Took 6 to 7 weeks for the bank approval, our offer was
the asking price. Ended up paying less (than the asking) at closing following the bank's appraisal.
Alot less per the bank's decision. Very weird and not much info throughout the whole timeline.
Obviously we were very happy with the end result despite the stress and unknowns during the
waiting period. Had all our paperwork in order at the time of the offer. Got a great place and are
lovin being part timers in the So Wal community. Hope this helps.

Why did the bank decide to lower the price after they approved your offer of the full asking price?

SHELLY · #**107** 02-14-2009, 04:18 PM

Quote:

Originally Posted by AAbsolute

Why did the bank decide to lower the price after they approved your offer of the full asking price?

I'm guessing it wouldn't appraise at the higher "asking" price. It's a lot different in Dodge since one can no longer get a "Hit This Number Appraisal" anymore.

.

Zirondelle · #**108** 02-14-2009, 04:43 PM

Hello! Very interesting discussion about short sales! We put an offer on a short sale house in Miramar Beach at the end of January and our listing agent told us there were 2 other offers on the same house. She even told us the amount of each of the other 2 offers so we offered more (actually we offered the full listing price). Who decides to accept an offer? The seller or the lender? Can the seller just sit around collecting offers until who knows when? Anybody know?

silvershark · #**109** 02-14-2009, 07:08 PM

Quote:

Originally Posted by AAbsolute

Why did the bank decide to lower the price after they approved your offer of the full asking price?

The bank's appraisal was done following our offer and came in considerably lower than our
offer much to our surprise We thought based on the numbers,we were getting a pretty good deal
at the full offer price. After the appraisal, which was pretty late in the game we would not have
gone forward with the full offer contract anyway. It was a long and winding road and had a good
result for us but seriously I think we had a good realtor, were aggressive from the start and just got a little lucky. Also we were not in a rush and were willing to stay in the game for a while. I don't know if that answered your question but its the best we can understand it. Hopefully the banks will get better at this game of short sales. Good benefits for all.

Alyoopster · #**110** 02-14-2009, 10:34 PM

Quote:

Originally Posted by Alyoopster

I have a question as a Buyer: I just put in a contract on a "short sale" home. Can anyone tell me the average responce time that they are getting from the lenders?? And what is the sucess rate of them actually closing the deal?? Our offer was more than the listing agent's list price.

I know i need to be patient but geezz....

I'm back with good news!! You all won't believe this...well at least i can't! The house that we made an offer on just last week as gone through already...and WE GO IT!!! I'm in shock as well as everyone else i have spoken too...especially our agent. We were told 6-12 weeks before we would hear anything and the chances of the bank accepting the short sale price was slim. OMG...i hope nothing falls through but all i know is the bank called and said "bingo"!!

I hope everyone else out there has the luck that we had. Best Wishes!!

Bobby J · #**111** 02-14-2009, 11:19 PM

Which Bank? Congrats. It seems like they are starting to move faster on some of these.

Alyoopster · #**112** 02-14-2009, 11:40 PM

Quote:

Originally Posted by Bobby J

Which Bank? Congrats. It seems like they are starting to move faster on some of these.

Again, this all happened so fast but i'm pretty sure it was Chase.

Smiling JOe · #**113** 02-15-2009, 04:30 PM

Quote:

Originally Posted by Zirondelle

Hello! Very interesting discussion about short sales! We put an offer on a short sale house in Miramar Beach at the end of January and our listing agent told us there were 2 other offers on the same house. She even told us the amount of each of the other 2 offers so we offered more (actually we offered the full listing price). Who decides to accept an offer? The seller or the lender? Can the seller just sit around collecting offers until who knows when? Anybody know?

An offer price is considered to be confidential and cannot be disclosed by the listing agent.

The contract for sale and purchase is between the seller and the buyer, not the lender. Yes, the seller can sit around collecting offers, but that won't get them very far, and allows buyers to walk at anytime, since there is no contract with only an offer, and no acceptance. Something better comes along, and bye-bye.

I think that short sellers who simply collect offers, do themselves an injustice and that allows the banks to never make a decision, while they hope for a better offer.

30ashopper · #**114** 02-15-2009, 04:45 PM

Quote:

Originally Posted by Smiling JOe

An offer price is considered to be confidential and cannot be disclosed by the listing agent.

The contract for sale and purchase is between the seller and the buyer, not the lender. Yes, the seller can sit around collecting offers, but that won't get them very far, and allows buyers to walk at anytime, since there is no contract with only an offer, and no acceptance. Something better comes along, and bye-bye.

I think that short sellers who simply collect offers, do themselves an injustice and that allows the banks to never make a decision, while they hope for a better offer.

Well not always, if she made those offer numbers up in her head.. she wouldn't be violating a contract, she'd just be comitting fraud.

Allyoop, you might want to talk to the selling bank, you may be the victim of fraud, in which case you could withdraw the offer and negotiate a lower price. Your whole situation sounds very fishy! Short sales going through in days, your agent telling you what the other offers are, you feeling compelled to offer at list... fish fish fishy!

AAbsolute · #**115** 02-15-2009, 08:54 PM

Quote:

Originally Posted by SHELLY

I'm guessing it wouldn't appraise at the higher "asking" price. It's a lot different in Dodge since one can no longer get a "Hit This Number Appraisal" anymore.

.

There's more wrong with this system than can be fixed. How is it that now a buyer can want to buy and a seller can agree to sell and at the same time an appraisal can come in considerably less? Now we're back to fixin' appraisals on the downside.? There is no more pure valuation than an arms length agreement. Maybe we're out-thinking things again with our huge brains.

I saw that provision in the Realtor contracts about the property now having to appraise out.

AAbsolute · #**116** 02-15-2009, 08:57 PM

Quote:

Originally Posted by silvershark

The bank's appraisal was done following our offer and came in considerably lower than our
offer much to our surprise We thought based on the numbers,we were getting a pretty good deal
at the full offer price. After the appraisal, which was pretty late in the game we would not have
gone forward with the full offer contract anyway. It was a long and winding road and had a good
result for us but seriously I think we had a good realtor, were aggressive from the start and just got a little lucky. Also we were not in a rush and were willing to stay in the game for a while. I don't know if that answered your question but its the best we can understand it. Hopefully the banks will get better at this game of short sales. Good benefits for all.

So the bank brought out a new lower price after you had a deal to buy the property for more. They did this without prompting? Did you have a kick out clause regarding appraisals?

Zirondelle · #**117** 02-15-2009, 11:13 PM

Quote:

Originally Posted by Smiling JOe

An offer price is considered to be confidential and cannot be disclosed by the listing agent.

The contract for sale and purchase is between the seller and the buyer, not the lender. Yes, the seller can sit around collecting offers, but that won't get them very far, and allows buyers to walk at anytime, since there is no contract with only an offer, and no acceptance. Something better comes along, and bye-bye.

I think that short sellers who simply collect offers, do themselves an injustice and that allows the banks to never make a decision, while they hope for a better offer.

Thanks for your response! Our agent told the listing agent not to disclose our offer to anyone since he/she is such a blabber mouth.

Bobby J · #**118** 02-15-2009, 11:55 PM

Quote:

Originally Posted by AAbsolute

So the bank brought out a new lower price after you had a deal to buy the property for more. They did this without prompting? Did you have a kick out clause regarding appraisals?

You keep on trying to make sense of all this....

LOL! It is pretty amazing. This is the stuff I have been talking about with Banks. Clueless!

Bobby J · #**119** 02-15-2009, 11:58 PM

Quote:

Originally Posted by Zirondelle

Thanks for your response! Our agent told the listing agent not to disclose our offer to anyone since he/she is such a blabber mouth.

That reminds me of the line in Horton Hears a Who. "Dont worry, we won't tell anyone and if we do, we will tell them to not tell anyone".

Congrats on your fast short sale!

AAbsolute · #**120** 02-16-2009, 08:18 AM

Quote:

Originally Posted by Bobby J

You keep on trying to make sense of all this....

LOL! It is pretty amazing. This is the stuff I have been talking about with Banks. Clueless!

Bobby, I had the inside on a bundling of REO's deal with a local bank. I can tell you that some banks are working a plan that they know an awful lot about. Fact: You will see banks call loans and take real estate in order to add some value to their bundled deals.

ray · #**121** 02-16-2009, 09:11 AM

aa with some properties moving into the $200 range per sf on foreclosures and short sales it will be hard to now build any cheaper including land.If banks keep this super tight lending up could we end up at $100-$150 a square foot on 30-a?Anythings possible.

Bobby J · #**122** 02-16-2009, 03:06 PM

Quote:

Originally Posted by AAbsolute

Bobby, I had the inside on a bundling of REO's deal with a local bank. I can tell you that some banks are working a plan that they know an awful lot about. Fact: You will see banks call loans and take real estate in order to add some value to their bundled deals.

Makes sense with a local bank. Large banks and working a plan....? Nope. I would have a hard time buying that one.

AAbsolute · #**123** 02-16-2009, 08:28 PM

Quote:

Originally Posted by ray

aa with some properties moving into the $200 range per sf on foreclosures and short sales it will be hard to now build any cheaper including land.If banks keep this super tight lending up could we end up at $100-$150 a square foot on 30-a?Anythings possible.

It's sure not going to be easy to be both busy and profitable as a builder again this year. We doubled our sales in '05 then doubled them in '06. '07 we doubled '06 sales again. As the markets turned down our sales grow, which we've seen happen in 3 recessions. I know it's only attributable to price versus value.

Now...... We have gotten fearful of taking new customers and are almost exclusively in equity transactions. We have referred out at least 12 incoming work requests to area builders who look like they do good work.

Alyoopster · #**124** 02-16-2009, 09:20 PM

Quote:

Originally Posted by 30ashopper

Well not always, if she made those offer numbers up in her head.. she wouldn't be violating a contract, she'd just be comitting fraud.

Allyoop, you might want to talk to the selling bank, you may be the victim of fraud, in which case you could withdraw the offer and negotiate a lower price. Your whole situation sounds very fishy! Short sales going through in days, your agent telling you what the other offers are, you feeling compelled to offer at list... fish fish fishy!

I think you have me confused with Zirondelle's comment. My agent didn't tell me the price of any offers and i wasn't compelled to offer at list.

As for my deal being "fishy". Why would my agent/broker/friend call and tell me the bank just approved our offer and it not be true??? I talked to them again today and everything is a go.

I'll update when we close in a few weeks.

30ashopper · #**125** 02-16-2009, 09:48 PM

Quote:

Originally Posted by Alyoopster

I think you have me confused with Zirondelle's comment. My agent didn't tell me the price of any offers and i wasn't compelled to offer at list.

As for my deal being "fishy". Why would my agent/broker/friend call and tell me the bank just approved our offer and it not be true??? I talked to them again today and everything is a go.

I'll update when we close in a few weeks.

You're right, sorry!

Dominoes · #**126** 02-16-2009, 11:29 PM

Anyone worked a short sale through Wells Fargo? I am hearing 30-45 days is the usual response time. I am a buyer not an agent. This is what my agent has told me the bank has said, but I didn't know if anyone had firsthand experience.

Bobby J · #**127** 02-17-2009, 12:52 AM

Quote:

Originally Posted by Dominoes

Anyone worked a short sale through Wells Fargo? I am hearing 30-45 days is the usual response time. I am a buyer not an agent. This is what my agent has told me the bank has said, but I didn't know if anyone had firsthand experience.

We will close one this month. It has taken close to 8 months to wrap the deal up. We are on the 3rd buyer. Finally, we have a go and the buyer is getting a great deal near 30A. The bank loss a bunch of money dragging this out. I find Wells to be one of the more difficult to work with in regards to short sales. Of course, every transaction is different.

AAbsolute · #**128** 02-17-2009, 07:53 AM

Quote:

Originally Posted by Bobby J

We will close one this month. It has taken close to 8 months to wrap the deal up. We are on the 3rd buyer. Finally, we have a go and the buyer is getting a great deal near 30A. The bank loss a bunch of money dragging this out. I find Wells to be one of the more difficult to work with in regards to short sales. Of course, every transaction is different.

Is it a short sale or a REO? Has the Lis Pendens been filed?

Smiling JOe · #**129** 02-17-2009, 08:35 AM

the progression of the sale type would be:
-regular sale
-short sale
-"in foreclosure" (Lis Pendens filed but bank not owner)
-REO (Real Estate Owned by the bank) where the bank has taken back the property and is now the owner

Bobby J · #**130** 02-17-2009, 12:21 PM

Quote:

Originally Posted by AAbsolute

Is it a short sale or a REO? Has the Lis Pendens been filed?

Short sale with Lis Pendens filed.

AAbsolute · #**131** 02-17-2009, 08:04 PM

Quote:

Originally Posted by Bobby J

Short sale with Lis Pendens filed.

So at or before closing there is a Stipulated Settlement and Termination of the Lis Pendens for the Insurance Underwriters? I can see how lots of things could pop up to tie up that kind of closing.

Bobby J · #**132** 02-17-2009, 11:49 PM

Quote:

Originally Posted by AAbsolute

So at or before closing there is a Stipulated Settlement and Termination of the Lis Pendens for the Insurance Underwriters? I can see how lots of things could pop up to tie up that kind of closing.

It is mostly the bank getting back with you about a price. The rest can be cleared for the runway in a few days. Basically, the processors are overwhelmed and it seems no one is really in charge. I would think in times like this the uppers in big banking would be rolling up their sleeves and getting dirty. Perhaps, earning the big salaries. It just seems to be business as usual and they are not going to miss a vacation a holiday, etc.

SHELLY · #**133** 02-18-2009, 12:34 AM

Quote:

Originally Posted by Bobby J

It is mostly the bank getting back with you about a price. The rest can be cleared for the runway in a few days. Basically, the processors are overwhelmed and it seems no one is really in charge. I would think in times like this the uppers in big banking would be rolling up their sleeves and getting dirty. Perhaps, earning the big salaries. It just seems to be business as usual and they are not going to miss a vacation a holiday, etc.

...with all the slicing, dicing and financial engineering that went into off-loading the toxic mortgages into the market, in some cases the servicer is probably having a hard time finding the entity that will allow them to take the offer. They've probably gotta send their scouts out into the desert on a camel and into the rice patties of the Far East to contact the hapless souls who lent their savings to investulators in Florida.

AAbsolute · #**134** 02-18-2009, 06:50 AM

Quote:

Originally Posted by SHELLY

...I'm sure in some cases, with all the slicing, dicing and financial engineering that went into off-loading the toxic mortgages into the market, in some cases the servicer is probably having a hard time finding the entity that will allow them to take the offer. They've probably gotta send their scouts out into the desert on a camel and into the rice patties of the Far East to contact the hapless souls who lent their savings to investulators in Florida.

I never really thought much about that angle. Countrywide, et al are not the holders of the mortgage anymore as they become merely mortgage servicers. They can't just cut a deal with a Realtor because, they have to find the note holder and ask them for permission to permanently wipe out the "short debt".

Bobby J · #**135** 02-18-2009, 11:57 AM

Quote:

Originally Posted by AAbsolute

I never really thought much about that angle. Countrywide, et al are not the holders of the mortgage anymore as they become merely mortgage servicers. They can't just cut a deal with a Realtor because, they have to find the note holder and ask them for permission to permanently wipe out the "short debt".

The first offer is typically the best offer on a short sale. Down hill from there. Banks are losing money left and right because no system is in place. Its all good though because they are getting bailout money that we get to pick up later. Who really cares if they let the properties foreclose and get 1/2 of what a Realtor tried to give them 3 months earlier.

LoveTheBeach2 · #**136** 02-18-2009, 06:24 PM

Quote:

Originally Posted by AAbsolute

I never really thought much about that angle. Countrywide, et al are not the holders of the mortgage anymore as they become merely mortgage servicers. They can't just cut a deal with a Realtor because, they have to find the note holder and ask them for permission to permanently wipe out the "short debt".

OK, I'm new to all this, doing my 1st short w/Countrywide. Seller just got their Lis and the Mortgage was assigned THE DAY BEFORE. To "Random Bank Trustee for Certificateholders blahblahblah" not BofA. I'm aware that it is possible that the assignment wasn't filed in a timely manner and Random Bank may have actually owned it for a while. But I'm also wondering - could this be an attempt to circumvent the much publicized foreclosure "moratorium"? If you read the fine print, it only applies to loans that Countrywide/BofA still owns and whatever investors that they can get to agree to it. Am I being too suspicious and jaded?

SHELLY · #**137** 02-18-2009, 09:32 PM

Quote:

Originally Posted by LoveTheBeach2

Am I being too suspicious and jaded?

In this market you MUST ALWAYS be "too suspicious and jaded," it keeps you on your toes and makes you ask the right questions.

.

Bobby J · #**138** 02-18-2009, 10:20 PM

Quote:

Originally Posted by LoveTheBeach2

. Am I being too suspicious and jaded?

I like Shelly's advice but it would imply the bank has a plan. CW has no plan.

Smiling JOe · #**139** 02-19-2009, 08:57 AM

Lovethebeach2, I believe that lenders are heavily regulated by the Feds and are limited to a certain amount of investments (eg- real estate), compared to money on hand. In order to meet those requirements, some banks are having to sell off those "assets," so they will bundle and sell to other banks or entities.

Alyoopster · #**140** 04-05-2009, 11:33 AM

Quote:

Originally Posted by Alyoopster

I think you have me confused with Zirondelle's comment. My agent didn't tell me the price of any offers and i wasn't compelled to offer at list.

As for my deal being "fishy". Why would my agent/broker/friend call and tell me the bank just approved our offer and it not be true??? I talked to them again today and everything is a go.

I'll update when we close in a few weeks.

UPDATE: We closed!!

After all the negative talk about short sales I'm happy to say the process was fairly quick and easy for us. I hope the best for everyone else out there dealing with this.

Offer on Feb 5th, Bank Accepted Feb 13, Closed on March 25th

Bobby J · #**141** 04-05-2009, 11:43 AM

Quote:

Originally Posted by Alyoopster

UPDATE: We closed!!

After all the negative talk about short sales I'm happy to say the process was fairly quick and easy for us. I hope the best for everyone else out there dealing with this.

Offer on Feb 5th, Bank Accepted Feb 13, Closed on March 25th

Congrats! Some are like this. Most are not.

Smiling JOe · #**142** 04-05-2009, 12:35 PM

Yes, most are not. Of the short sale closings I've been watching, I'm seeing many which are finally closing, 5-6 months after the contract date. Values likely drop 2-3% during that time, as REO sales are coming in with really low purchase prices.

Bobby J · #**143** 04-05-2009, 04:47 PM

We just closed a short sale condo that only took a few weeks. The bank was not out much money though. It seems the bigger the bank the slower the response.