Well our paperwork finally made it over to a negotiator so thats better news...this area property values have declined...and forclosures are pretty much out of control. the deal was not so much the "want"factor but the home and location of it all.

Jen, sound like it was issue 3 that i outlined, and Don (below) is right, this disorganization is very typical (unfortunately). I would tell the seller: "If you can get the bank organized feel free to call me and we can discuss if I am still interested in the property but until then I am going to continue my search." Scare the home owner into action. It may work, but for your sanity, I would move in a different direction.

Good luck!

What you're describing is very, very typical. From the outside, it remains a mystery whether such behavior reflects disorganization or whether it's intentional. Many investors think it's intentional, not just a reflection of incompetence. Similarly, it's standard to talk to multiple people. In fact, it's highly unusual at this stage to be able to call and to speak to the same person again.

I'd say "move on." Although this is entirely typical for short sales, the whole agonizing process catches a lot of people (including yourself) understandably off guard. And I'd say "move on" for another reason, too. All real estate is local, and I don't know about your market. But you say that she financed around $173,500 about 5 years ago. In many parts of the country, prices today are about where they were 5 years ago, plus or minus a bit. If that property is worth, say, $173,000 and you're offering $150,000, sure you're getting a good deal. But it's obviously not the deal of the century...or of the decade. Have you gotten a CMA on the property?

Probably not what you wanted to hear. But I hope it helps.

The homeowner has spoken to her bank about short sale and they seem to have an agreement there. The mortgage co is based out of OH so hand delivering is impossible. they seem to be very disorganized...they wont actually assign her a mitigator til they receive our paperwork, yet they keep misplacing our faxed paperwork over. Its in the loss mitigation department but we cannot speak with one contact person, so it has made it very difficult. they want our bid but havnt set a price. There reason for not calling us with an answer was they didnt receive our paperwork, so following up at least has done us some good.

well, I'll tell you that we have several short sale offers in that the owner has accepted that the bank hasn't even bothered to get back to us about, the longest one... 2 months and counting. The banks are not prepared for what is happening and the the process is going very poorly

Sounds like there are a couple issues here:

1) It seems very clear that the bank and the owner have not had the proper discussions and passing of paper work. The only way to make this easier for you is to tell the owner/seller that you will not be moving forward until they (and/or the owners realtor) speaks with the bank directly and delivers them all the paperwork they need to process the sale as a "short sale." The bank has to approve the short sale and based on your story, it seems the bank has not come to an agreement with the seller and most importantly approved a sale price (the loss is something either the bank is going to have to eat or the seller is going to have to pay out of pocket and that must be agreed to first). This probably explains the delay and all the confusion. One of the reasons short sales can be so frustrating is because the seller hasn't done their due diligence with the bank but still goes ahead and markets the property for sale at a certain price. Once they get a buyer then they submit their paperwork which just adds time and headache for the buyer.

2) Where is your realtor in all this? Seems that you have not been informed properly of the stages of a short sale purchase. It can be very difficult and time consuming to purchase a short sale - and there are many hoops to jump through with the bank - and your realtor should walk you through all the options. Any chance your realtor is representing the seller (owner) in this transaction as well?

3) In the event that the owner has made a short sale agreement with the bank and they are still messing up, this could just be a severe case of disorganization on the banks part. This is also another downside to short sales. Some of these banks have stacks and stacks of short sale paper work and no plan in place.

My advice are the following two options:

1)Move on for now. Like I suggest earlier, tell the owner/seller that they must get full approval from the bank (square their situation away) and then call you to discuss. Pull your offer off the table and wait for things to clear up. In the meantime, try and find a professional who will talk to you about short sales so you can be educated about the process when the seller approaches you again.

2) Keep you offer alive but tell your realtor to pull some weight! Have them call the bank directly and do some homework to get to the bottom of the situation. Have your realtor hand deliver the paperwork if they have to ...

By the way, I am in no way suggesting not to buy a short sale because in the cases where the seller and banks are organized there are some great deals to be had but you just need to know what to look for in these situations.

Hope that helps! best of luck!