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Loren's Blog

By Loren | Home Buyer in 55405

Short Sale Nightmare!

I've been looking for a house for my girlfriend and I since mid summer.  We have looked at over 60+ places.  The market in Minneapolis is not all that great it seems.  From my perspective things are still over valued except for certain neighborhoods that have been hit pretty hard by the foreclosure situation.  Early on I put an offer on a short sale property.  First the buyer accepted and the bank declined (or so we were told).  Then the bank accepted and the buyer declined.  Eventually I walked away and put an offer on a place two houses down.  Another short sale, but this time listed by someone that was sure we could get the deal done since they indicated a strong knowledge around short sales.  We kept looking even with offers in the works just in case.  Plan B quickly became plan C followed by plan D. 
We offered on a foreclosure at over the list price and lost out by a thousand dollars. 
More looking, now the offer we had walked away from wanted to know if we were still interested.  It had taken them nearly 45 days to come back asking for another $2,100.00 dollars.  I couldn't believe it. 
Finally, we put an offer on a place that we both really liked and would love to move into.  Again the selling agent indicated they could get it done quickly.  That was nearly 60 days ago.  We followed by putting the final offer in on a place that is not occupied and indicated a fast close possible.  That was nearly 30 days ago. 
The unfortunate thing is that now, we both have to vacate our apartments at the end of this month and the likelihood of finding a place by that time is pretty much nonexistent.  We are still looking and spend last weekend looking at places that weren't short sales and really weren't that impressed even at prices that were out of our range. 
I'm a first time home buyer and have learned a lot.  I was naive in many ways and felt that with all the housing price complaints and the banking debacle, that someone pre-approved for a loan, not really all that picky, a wide search area etc, would lead to a house in a short period of time.  People sort of warned me against short sales but in this market it seems that most of the recent listings are short sales and yet the listing agents don't seem to interested in being honest that they may take excessive time.   
I have made several offers so far and have two active offers waiting for a response from the bank.  I understand there is a huge fiscal crisis going on at the moment but from what I can tell, the banks helped cause the problem and now they seem to be perpetuating it.  We keep looking but we've seen so many that at this point I'm considering just waiting until one of the deals comes through.  With winter coming soon, more options will show up I'm sure but it seems that even when I'm waiving around a fist full of money, the banks just don't seem that interested in acting.  It is kind of hard to have sympathy for an industry like that. 

Comments

By Voices Member,  Fri Oct 10 2008, 06:03
No urgency from banks on short sales, they are ill-equipped to handle them. Be careful when dealing with 'short sale experts', they probably picked up a read on the internet and are out to make an attempt to capitalize on a segment of the market.

Have you tried looking at bank owned REO properties? Most banks/asset companies you can generally hear back within 48 hours. However, some companies like Countrywide have their head in the sand and are so far out of touch.
By Loren,  Fri Oct 10 2008, 06:47
Jason,
All true and all correct. Unfortunately. Basically, I learned a lesson that the bottom line is time. If you mess with a short sale, be prepared to wait, for a long time, in the dark. On the other hand, one of the offers did come back to me, but I had moved on by then. And hopefully, knock on cubicle wall, the bank is going to get back on one of the active offers I have by Tues.
I did look into some of the REOs and if I was going to do it over again would have taken a different approach.
By Maria Morton,  Fri Oct 10 2008, 07:27
Loren, now you know how short sales are. Buyers do not believe me when I tell them it will be a long and arduous process. Banks are very difficult to deal with. They don't take care of the properties. They are slow to respond. Often, they do not want to comply with the law or follow the rules the rest of us follow. They make poor choices when choosing the best offer. They don't have adequate staff to handle the volume of short sales. They don't know how to price a property; nor do they care. The condition of the property is not important to them; what they are looking at is how much they can get out of it to cover the loss they are going to take.

If you really want to buy a home to live in, I'm surprised that your agent has not shown you homes other than short sales. You can usually find a home in better condition at a reasonable price that will be much easier and quicker to negotiate to closing.

Good luck!
By Loren,  Fri Oct 10 2008, 07:36
Maria,
In defense of my agents, they have shown me other places. In all we've looked at over 60. I just didn't find anything that was really that great in the non short sale price range. I am the kind of client that likes to do my own research and direct the process more than most clients I suspect. We're a good team overall. It was just a steep learning curve.
Loren
By Voices Member,  Fri Oct 10 2008, 07:55
I like to say when banks want to fire somebody they send them to the loss mitigation department because they are gone so fast, you never talk to the same person.

Hopefully everything works out for ya
By Voices Member,  Fri Oct 10 2008, 08:02
@maria morton why wouldn't banks know how to price properties? They do their due diligence, they order appraisals, BPO's, they just don't go in blind. They aren't just going to take a loss because it is the thing to do, some banks are letting them go to foreclosure because they believe and that the keyword that they will net more when they have the property solely in their possession. Sometimes it doesn't make sense, but what does these days. Less than 35% of offers on short sales actually get accepted.

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