Short Sale Question

smiths07

LoanSafe Member
Sep 10, 2008
1
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A brief history: made an offer on a short sale property 7/5, according to realtor representing the seller, ours is considered #1 of three offers. Updates to us have been via a website every friday,in addition to my realtor contacts with seller realtor. Latest update has "negotiator reviwing BPO, second lien company has ordered a BPO". Now, just yesterday, my realtor contacts me and says the realtor for the seller (short sale property) called him and told him they ( the bank) want a counter offer for $10,000 more. No problem with us. However, my realtor requested from the realtor paper work from the bank for counter offer so we can make the changes. A day later, no fax with the papers. So my realtor called the realtor back, and the realtor says to just change the amount on the first page of contract and fax it to them. Now, my concern is are we being set up for a bidding war? Is the rep for the seller going to take that inreased offer to the other two offers on the home and try to get more? Why wouldn't the bank contact us in some official way with a counter offer request?
 

faith

LoanSafe Member
Feb 1, 2008
973
9
0
California
A brief history: made an offer on a short sale property 7/5, according to realtor representing the seller, ours is considered #1 of three offers. Updates to us have been via a website every friday,in addition to my realtor contacts with seller realtor. Latest update has "negotiator reviwing BPO, second lien company has ordered a BPO". Now, just yesterday, my realtor contacts me and says the realtor for the seller (short sale property) called him and told him they ( the bank) want a counter offer for $10,000 more. No problem with us. However, my realtor requested from the realtor paper work from the bank for counter offer so we can make the changes. A day later, no fax with the papers. So my realtor called the realtor back, and the realtor says to just change the amount on the first page of contract and fax it to them. Now, my concern is are we being set up for a bidding war? Is the rep for the seller going to take that inreased offer to the other two offers on the home and try to get more? Why wouldn't the bank contact us in some official way with a counter offer request?
________________________________________________________________

Hi Smith07,
Peace be with you. The bank will not contact you because you have a real estate agent. In Short Sale, the lenders only talk to the agents, they don't talk to the buyer's agent, they only talk to the seller's agent. When I put my house in the market doing Short Sale, my buyer's agent email my Countrywide Home Loans Negotiator and asked him(Negotiator) how come it's taking him too long to make a decision to accept the offer. The Countrywide Home Loans Negotiator responded to my agent via email and sent copy to me saying, tell your buyer's agent that I can not talk to her because she is not the seller. The buyer's agent needs to communicate with the seller's agent.

Since you are the buyer, to make sure that you are making the right offer, go to zillow.com and put your zip code and find out how much is the selling pricesi in your area. Fair market value or the BPO's is not the best thing to use to make an offer, whatever is the selling price in your area, say $350,000, make an offer of 90% which is $315, the lender accepts an offer of 90% of the selling prices or the BPO which ever is greater, but not more than 90% of the selling price or BPO. As a buyer you will have to pay the closing costs, if they are asking you an additional $10,000 to the offer, tell your agent to tell the agent that you are accepting to make an additional offer of $10k but this amount is to be applied to the closing costs. Believe you me, closing costs is too expensive, so why not use the bargaining idea as a tool to put it to the closing costs, at least it will save you money.

In my case the selling prices in our area was $300k so I told my agent to list at $290k with a note "Short Sale Pending approval of the Lender". I've got 10 offers, the first 7 offers backed out due to long process, but the 8th offer made an offer of $298k eventhough I was only selling it for $290 with the condition to apply the additional offer of $8k to the closing costs. My agent also negotiated to my lender that there's no cost to me. Countrywide Home Loans paid my agent 5% of his commission, in Short Sale, the lenders pays for your commission.
So if you and the seller has a good agent and work things out and cooperate to each other everything will run smoothly and will close the deal.

Short Sale is a long process, it took me 2 listings, 7 buyers backout, 10 months before Countrywide Home Loans approved the Short Sale and additional 1 month and 10 days to close the escrow. You have to be on top of everything, calling and emailing your agent, your agent must do the same, and the seller and his agent must be calling, emailing, communicating with the lender.

You have to be strong, persistent, and have a lot of patience to have a successful Short Sale. I hope everything will be fine with you and that God will give you favor from the buyer's agent, buyer, your agent and the Negotiators of both lenders.

God bless you and take care,


Faith :cool:
 

shubbard

LoanSafe Member
Aug 6, 2008
2
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0
Faith-

Actually, the buyer or buyer's agent can negotiate with the lender directly. The reason why the lender in your case was unable to speak to the buyer is due to the fact he or she did not obtain an authorization release signed by the borrower giving permission to speak with the lender.


IMHO, I would not use zillow.com to gauge an offer. It has been shown to lag or lead when prices shift dramatically. Instead, I would use two or three agents to visit the property and ask each to provide a CMA and at what price they believe this property should be offered.

Lastly, I would beware of any buyer's agent that is unable to convince the listing agent to handle the negotiations. Unlike a traditional resale, the lender must approve the sale price. Listing agents act on their clients best interest and not yours. Their client does not have pricing power the lender does. So why would anyone go through a mediary? It is stupid to do so.

Anyone trying to buy a house through a short-sale should educate themselves prior to getting involved. You can do it the wrong way and end up with a lot of headaches. Believe me, I ahve learned the hard way.
 

faith

LoanSafe Member
Feb 1, 2008
973
9
0
California
Thank you for your opinion.
It probably depends on how many buyers make an offer to the house and who is your lender. The trick in offering 80% to 85% does not work with Countrywide and does not work if there's 10 buyers offering to buy a house at the same time. Countrywide will accept 90% without a problem why risk of being denied, Negotiators of Countrywide Home Loans does not want to waste time in accepting offers, why making an offer of 80% and counter or 85% when you can get the house at the right offer of 90%. Even if you are at the 8th offer, which my buyer was, she and her agent made the offer at 90% right away and me as the seller requested the CW Negotiator if he can can accept the highest offer which is the 8th offer and he did. I gave the agents permission to talk to the Negotiator but he didn't want to talk to the buyer's agent.
Again, it depends on the lender and the Negotiator and how many offers you have in the house. If you want to be approve in Short Sale right away, the proper timing and pricing and offer is one of the keys in successful Short Sale.

Thank you, I appreciate your opinion because it really counts. God bless you.


Faith:cool:
 

faith

LoanSafe Member
Feb 1, 2008
973
9
0
California
Shubbard,
I'm sorry I was in a hurry to hit submit because my husband wants to have breakfast at McDonald's. I have reviewed your comments and I really appreciate your suggestions. We are talking two different things, you were talking from the buyer's stand point of view and I was talking from the Seller's stand point of view.

Thank you for taking the time to make suggestions to homeowners who are struggling right now. I am sure they can get an idea from your suggestions.
You are right for everything you have suggested and again I'm sorry and thank you so much.

God bless you and your family and take care.


Faith:eek::eek:
 

shubbard

LoanSafe Member
Aug 6, 2008
2
0
0
Faith:

We are both right. In a multiple offer situation, the lender would not want to deal with each buyer.

Truth is, I would not want to be involved multiple offer anyway.

In my contracts, I put a clause in that upon acceptance of the offer, the lender waives their right to file a deficiency judgment. This protects the homeowner, but puts my contract in an inferior position as lenders do not want to give up their rights to collect. As a result, I want to avoid multiple offer scenario's.

Thanks for your kind response.

Scott