Home Buying in 19090>Question Details

J, Home Buyer in Pennsylvania

Most recently a property in Abington that I was very interested in purchasing slipped right from under me.

Asked by J, Pennsylvania Wed Jan 14, 2009

I was advised that the property was an REO and he/she would review the corporate addendum. A week went past and I inquired about the status of the corporate addendum and I was told that he/she needed others that work within their team to review the paperwork because there are some things that they didn’t completely understand. But my realtor also stressed that he needed a Good Faith Estimate from my broker. My broker placed a call to the realtor and provided such information over the phone. Mean while the 2nd week is approaching and the realtor still hasn’t received any clarification on certain sections of the corporate addendum. I advised the realtor that I will get an attorney to read over the paperwork, so I wouldn't waste anymore time. The realtor agreed but informed me the he needed the Good Faith Estimate b4 submitting my proposed offer. He wanted to see the Good Faith Estimate in writing rather than t

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Your experience is not an isolated one. A recent survey conducted by the National Association of Realtors (NAR) cited that 54% of practitioners were involved in a short sale in the last 12 months. 87% of respondents to this survey faced impediments by lenders or loan servicers. Furthermore, 94% cited 'lack of response by lender or servicer' as the chief impediment for processing short sale applications. Draw your own conclusions from the statistics, but it appears that lenders/loan servicers are perpetuating their own downward spiral through inaction and apathy, and contributing indirectly to the evaporation of household wealth and community values for all of us.
1 vote Thank Flag Link Wed Jan 14, 2009
Hi J,

Sometimes working with REO property can be exasperating. I am not sure that I understand the full question since it looks as if you ran out of space in mid sentence. Here are some general facts about today's real estate climate.

1. You can find some great bargains, but you have to be ready to compete for them. The market is still slow, but there are buyers out there looking for their next purchase. When a great deal is available there are often several offers.

2. In order to be competitive you need to have you paperwork ready to go. The sellers' employees are extremely busy and don't have any patience with Realtors who submit offers without all the required documentation. They have posted notices listing documentation and addenda that must accompany the offer. If any part of it is missing they will not look at your file. PERIOD.

3. One part of the paperwork that MUST accompany your offer for every lender that I know of is a WRITTEN pre-approval letter. A pre-qualifying letter is not strong enough. There must be solid evidence that you are truly qualified to purchase. Without proof of your ability to purchase your offer will not be considered. The days of "get it to us when you can" are OVER, at least for now.

4. When the seller is a bank, or bank approval is needed it will take some time to get a response to your offer. Again the Realtor has very little power to speed up the process.

5. The bank can impose rules on the process and stipulate terms. For instance it is not unusual for them to demand that the buyer pay all transfer taxes. I have seen fees charged to the buyer that are called 'loss mitigation, or loss abatement". The point is that you and your Realtor need to know what your costs will be so that you can take them into consideration when you are writing your offer. You don't want to battle over the last $500 of the contract price and then find out that you will pay thousands more in fees and taxes than you expected.

So go ahead and get your pre approval letter in writing. If your bank is not cooperating get another lender. You won't get anywhere without it.
1 vote Thank Flag Link Wed Jan 14, 2009
For me red flags go up when a mortgage broker does not want anybody to see the details of the loan they are offereing. Just a quick question........ Is the mortgage broker you are working with local the the area where you are buying?

If not, then I have found that it is a very to get a second opinion from a local lender. Compare fees, points, rate, terms, etc. There can be a huge difference from one lender or mortgage broker to another. Unfortunately the the successful scoundrels are the nicest people in the world until you try to shop and compare. Then you may see another side of them.

Just a caution; there are good and bad lenders and brokers everywhere. We all want you to find the best.

Good luck!
Eileen's Green Team
0 votes Thank Flag Link Thu Jan 15, 2009
I would like to thank everyone for their quick & helpful response. As Eileen stated I did run out of space. My other major concern was the fact that the realtor wanted my broker to send him a Good Faith Estimate in Writing rather thatn provde that informatoin over the phone. My broker was concerned about running tthe risk of having the realtors inside broker shopping the deal. My borker stated the by law brokers are required to prove Good Faith Estimates to the protential buyer and the bank. The realtor comes up with their Buyer Estimate etc. Is this a normal process? In the past I never had this problem.
0 votes Thank Flag Link Thu Jan 15, 2009
I have known the banks to take as long as 14 mos.
0 votes Thank Flag Link Wed Jan 14, 2009
J
My experience lines up with what Eileen and Edmund expressed; preprepared and be prepard to wait on the Bank/seller. Demandign an answer back will get you no where, and may be counter productive.
I also second Edmonds comment that many banks do not appear to cooperate as well as they could to get properties sold.
Hope that helps
0 votes Thank Flag Link Wed Jan 14, 2009
j,
i can understand your frustration. REO's can be a difficult transaction to complete, however they can be done smoothly with the right agents. it sounds like you had a new agent that was not versed in REO homes. A lot of the things you say happened sound very much like your agent didn't know what needed to be done. REO's can take time and patience. I would have pushed for an answer from the bank in 48 hrs and have signed paperwork back inside 5 business days. I am interested to know how this turns out, let me know if there is anything i can do.

Dennis Strange
RE/MAX Premier
215-396-4600
267-767-8558
dennis@DennisStrange.com
0 votes Thank Flag Link Wed Jan 14, 2009
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