Home Buying in 91301>Question Details

We2, Home Buyer in Los Angeles, CA

Buyers rights and questions to ask in a short sale process.

Asked by We2, Los Angeles, CA Fri Feb 27, 2009

Hi - We have a signed offer with the seller, submitted to Countrywide on January 16th for a short sale. Countrywide was supposed to respond with something yesterday. That did not happen. What questions can I ask of our agent to find out what has been accomplished and what still does need to be, so that at least we are not left in the dark completely. From what I read, agents can call Countrywide with the case number and they will give them an update.

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We2’s answer
Thanks for your responses. Just as a follow up, I was just informed that the reason why Countrywide did not respond on the 26th was that the seller, without the agents knowing was trying to do a loan modification at the same time and the file had been moved out of Short Sale to Loan modification. Apparently now that it has been decideded that he will not be able to loan modify the file is back is short sale.. We will see what happens next.
0 votes Thank Flag Link Mon Mar 2, 2009
No wonder Countrywide has so many REOs on the market. I wonder how much more these properties would have sold for if Countrywide had sold them while they were short sales within a reasonable amount of time.
0 votes Thank Flag Link Fri Feb 27, 2009
Thanks. I am learning about patience.... I definately am not a good candidate. Have a great weekend.
0 votes Thank Flag Link Fri Feb 27, 2009
To add to my answer below and to agree with Dyanna... D) Buyers who actually wait the 2-3 months for the bank to respond could hear one of three choices. Like any transaction the seller (in this case the bank) can accept your offer, counter your offer, or even reject your offer. Waiting 2-3 months to hear the latter two responses, in my opinion, is just crazy! Especially like I mentioned in C) (below), there are other deals the buyer could be missing.

E) *IMPORTANT* Banks usually will not do any repairs on short sales! Buyers can ask for reparis, but usually, what you see is what you get. Buyers should do proper inspections with licensed inspectors.
Web Reference: http://www.themmteam.com
0 votes Thank Flag Link Fri Feb 27, 2009
I have to agree with Ryan. I had a short sale with Countrywide and it took them 12 months to tell us NO. We submitted the offers to Countrywide and the file did not move from one desk to another for about 4 months. Then when it did move the approval we received 7 months in to the short sale was too high, the market has declined. So we go back to step 1. After 12 months Countrywide told us that they were going to trustee the property and they had to protect the investor. Its a shame that they treat agents this way. What would happen if all agents STOPPED doing short sales on Countrywide owned properties? Countrywide along with Washington Mutual are 2 of the most difficult to work with banks.

Good Luck!
0 votes Thank Flag Link Fri Feb 27, 2009
Hello! If it helps, I can share my experience with Countrywide. I currently have a home that I listed for sale in mid December. Shortly after listing it we received several offers. The short sale has moved from a Phase 1 negotiator (the person who verifies that they have all the information they need from a buyer and the seller) to a Phase 2 negotiator. According to Countrywide the Phase 2 negotiator made a note in the file on February 2nd that they had the file and would contact me as necessary. So far no calls from them. I continue to send daily emails to the negotiator with no response. I call the bank on a weekly basis for updates. Yesterday I was told that they can request an update, but that it will take 72 hours for a response.

As the previous agents mentioned, patience is the key!

Also, it is a good idea to try and find out as much as possible about the seller's situation to see if there is a likelihood that the short sale will be approved. Most of the banks truly require a hardship before approving a short sale. I have seen several situations where investors are trying to dump properties and the short sales are not getting approved.

Good luck to you!
0 votes Thank Flag Link Fri Feb 27, 2009

Short sales are a very complicated process. Most short sale transactions never happen because the banks take too long to respond. My team just closed a short sale where the bank took six months to respond. It's a common belief among realtors that it's a miracle if a short sale actually succeeds in closing.

To answer your questions, yes agents should be in contact with both the listing agent and the bank to see where your offer stands. However, as mentioned above the banks can take as much time as they want until they feel they have a solid offer. Yes, meaning other offers can be submitted to the bank.

My team usually informs buyers of short sales that A) Short Sale prices are usually priced very low so that the banks can get some attention on the property. In my experience, short sales have been selling for equal or higher than list price. B) that the length of the average short sale transaction that closes, including escrow, takes about 3-4 months. Banks are supposedly getting better at responding, but I haven't seen it happen yet. And C) since it takes song long for a response, buyers should be aware of their time frame. Do you need to move right now? Most likely that ain't going to happen. Also, with lengthy waiting periods, what other good deals are you missing?

Hope this helps, my team and I have closed quote a few short sales. Although we don't approve of the banks processing period, we do have the knowledge on getting them closed. Feel free to contact us any time.

Web Reference: Http://www.themmteam.com
0 votes Thank Flag Link Fri Feb 27, 2009

Your information is correct.

But unfortunately, because your agent call with the case number and speaks with a representative doesn't mean they will be provided with meaningfil information. We do recommend calling on a reguar basis, several times weekly, becoming familiar with the names of the players involved beyond the assigned case worker, receptionist, supervisor, anyone that might be able to support your interests. The more informed you are and the more names you can drop will not hurt your situation.

Good luck
0 votes Thank Flag Link Fri Feb 27, 2009
A short sale transaction requires an extreme amount of patience. The most important advice I can give you is to build a relationship with a contact person with Countrywide and constantly call them to guide your agent through the process. This person will be your best source to assist you through the transaction. The lending institutions are swamped with so many files and are very short staffed. Be Patient.
0 votes Thank Flag Link Fri Feb 27, 2009
Not to disillusion you but here is my experience with Countrywide. An offer for a short sale was written on August 12, 2008, accepted by the Seller, and after a lot of hassles ,has just been approved by Countrywide. We open escrow today. Not every case should be like this, but its better to be prepared.

Bob Khalsa
Broker Owner
United America Realty
0 votes Thank Flag Link Fri Feb 27, 2009
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