I can't say, but I would venture to guess you are not being tricked. If you feel this unsure about your agent, it would be best for everyone concerned if you found someone you trust.

Mon Jun 9 2008, 16:38

Short Sales are tricky as you're finding out. It is reported that only 95% of properties offered for sale that are "short" will successfully close escrow. This is often due to inexperienced agents as well as home sellers who are not actually suffering financial hardship enough to qualify for relief from their lender. Many of these properties ultimately end up as bank foreclosures. Best of luck to you!

Wed May 21 2008, 09:33

My recommendation, never make an offer on a property where the listing agent is not already in conversation with the lender. Many real estate agents do not know how to negotiate a short sale and therefore list the property low, wait for multiple offers and only then start talking to the lender. This is a recipe for a long, drawn out, often unsuccessful process. If you work with a short sale specialist as you buyer's agent, they can often convince the listing agent to let them do the hard work to get the approval, then you have a higher chance of actually acquiring the property. Otherwise, the way it usually ends up is the person who is willing to wait the longest actually acquires the property, or the bank forecloses and you get to buy from the REO listing agent. So if you are willing to wait 6 - 12 months to buy these properties, you might actually become a homeowner.

Tue May 13 2008, 18:09

These are all good answers and I've probably been through all the scenarios myself when trying to buy short sale or foreclosed properties. As an example, I offered $220,000 on a house and waited for a response from the seller. I waited several weeks; then I waited several months. I had made the offer in October and my agent still had not heard from the listing agent or the seller. They never said yes and they never said no. We thought the bank was waiting for better offers...but we really didn't know because the communication between the seller, the listing agent and our agent was almost nonexistent. I know that because I was on a cc on the emails my agent wrote to the listing agent. Finally, after 5 months, I told my agent to give up. Though I wanted the house, I didn't want all the aggravation that I thought we might encounter with the closing process. The house stayed on the market and finally sold 60 days after I quit trying for $210,000. The bank lost another $10,000 by not accepting my offer. But it's not the loss mitigation officer's money -- it's the bank's money so they keep playing these delaying tactics and sometimes they win...and many times they lose. I might suggest that you next trying REO properties instead of short sales. I got much quicker responses with bank owned properties than short sale houses. I also learned to deal with the real estate agency that lists most of the foreclosures in the area as they are usually in immediate contact with the bank; also an agent in that agency will get any changes or revisions quicker than an agent in another agency. Since you are in CA, I might suggest that you look at the REO properties being offered by Bank America and Countrywide. They list their REOs by city, price and listing agency. I found Countrywide very easy to deal with: quick answers and paper processing. Whichever way you go, Good Luck

Sat May 10 2008, 10:45

Thanks everyone. :

1) Both the properties have been advertised for nearly 3 months and don't have leneder approval yet (as per the listing agent) and got the appraisal only this week. The listing agent says, she will sent the offers to the banks after she gets the lender approval which should be coming anytime now.

2) They listing agent is telling my agent that he/she has better offers and then my agent comes back to me and I make a higher offer.

So the bank is not involved yet. How do I know/confirm that the listing agent has better offer except to trust his/her word coming via my agent. I trust my agent but I'm getting little concerned that if she is being tricked by the listing agent.

Now my offers are higher than the last one sold and I've decided that it's enough. I'll keep you updated.

btw- May be it's not called "counter" as you have pointed out. May be called best offer but I've given multiple best offers on both properties.

Sat May 10 2008, 10:18

Very very very common. One of the big challenges with the short sales is that most of these properties were bought with a frist and a second. They have to get the 2nd lien holder to agree as well and just about every prroperty sold from 2005 on will leave the 2nd lien holder with zero.

The Feds spent nearly 6 hours with the big banks last week discussing how to resolve the 2nd lien holder problem. One of the proposals is for the first lien holder to give some sort of token paymnent to the 2nd holder if they agree to a short sale. The other big problem with the 2nd holders (also the first) is that they don't have the staff or money to process. The banks are overwhelmed.

Expect to see more short sales going through later on when all this gets figured out. In the meantime, you'll need to make offers on many of them in order to get one to stick. I found it to be too much of a pain and decided to just buy an REO.

Sat May 10 2008, 08:18

As the others have said, what you're describing isn't unusual. No, it's not likely your agent is incompetent or the other is playing games. It's just that the bank has its own processes and its own time frame in which it operates. And it obviously wants to get as much as possible for the property.

Your statement: "I've reached the price level of recently sold home in the neibourhood" is very telling, and a good illustration of why short sales aren't always a good deal. Take, for instance, a house that sold at the peak of the bubble for $600,000. The lender's into the property for $600,000, plus all of its expenses. Properties in the neighborhood are now worth $500,000. The house comes on the market as a short sale at $475,000. Then, through the process you're experiencing, the price gets bid up to $500,000. The bank's still losing over $100,000 on it, so they're not the most cooperative seller. On the other hand, the purchaser is no longer getting any bargain. Instead, he/she is going through the stress and aggravation you're describing in order to buy a property at market prices.

There are plenty of bargains out there that aren't short sales. Consider, using the same scenario above, that someone bought the house in 1990 for $190,000. Other houses are now selling for $500,000. If the owner has to sell, or wants to sell, he may be quite willing to accept $475,000. It's still a nice profit for him, and a good price for you.

Hope that helps.

Sat May 10 2008, 07:34

Hi G,
First of all, short sale properties are sold short of what is owed on them making them (Most of the time) fabulous values. And, yes, it can start driving up the price if the home is really nice and there are many people interested in it. However, when a bank puts a home on the market a BPO had been done on it by many agents. This is a broker price opinion and it much like a comparative market analysis. So, they know what the value should be. I would not try to low ball a short sale since it is already being sold short of what is owed on it. Many banks won't accept the price you have offered. They can be much worse than a regular seller because really, they don't seem to care. It is just another file or transaction to them. And, the banks can take a ridiculously long time to get back to you because they are inundated with short sales and foreclosures now. Short sales can be fabulous deals, but you will have to be patient with the banks once you get one accepted by the seller.

I would keep trying and listen to your agent. He/she is only trying to help you. I hope you get the home you want. Good luck! If you have any other questions, feel free to comment. I hope I have helped answer your question.
Regards,

Joan Patterson
Keller Williams Realty

Sat May 10 2008, 06:49

Most banks make you sign their P&S addendum without the opportuinty of making changes. Usually they reserve the right to accept a better offer up unitl the point of closing. It is in the banks interest to have as many people involved in bidding as possible.

They will rely heavily on the listing agent for information regarding the level of interest being shown. They are trying to take as little hit as possible.

Sat May 10 2008, 06:41

You may want to forget it on this house and find another.

Sat May 10 2008, 06:33

Short Sales can be like this. The banks are often tougher negotiators than Sellers! They know what is owed on the mortgage and the costs they've incurred to date. It's a misconception that you can "low ball" these properties and get the lender to take the offer. They know and have researched the market area very well and are making a non-emotional business decision.

It takes a long time to get an answer from the Loss Mitigation Specialist, an employee of the Lender. Once they have their paperwork in order, there are often multiple offers that have been submitted to them. I would think that your Realtor is being straight with you and not trying to drive the price up. This situation is just as frustrating for most Realtors as it is for the Buyers.

Sat May 10 2008, 06:23

Banks can take days, weeks, or even months to respond. Every bank is different, and the same bank may respond differently in various geographies.

The term "counter" seems odd..... What would not be odd is for a bank to come back (even after a really long time) and ask for your final and best, or simply let you know you are out of the running with your current offer, but may resubmit another offer.

If you presented a low ball offer, the bank may easily simply ignore it........not even acknowledging it to the agents,

I do not suspect that your agent is playing games with you. Your agent has no purpose in having you sit without any indication of acceptance or rejection. Your agent wants you to buy a property that meets your needs and one with which you will be happy. When you sit in limbo, so does your agent. You may sidestep other possible properties while awaiting a response from the bank. Your agent has no reason to promote this situation. For agents, working short sales is time consuming, and frequently results in no sale, while delaying the buyer from pursuing other properties. I don't know every detail about your agent, but.......from knowing short sales........I can take an educated guess that the obstacles rest with the bank and not the agent.

I don't think you are being tricked. You are simply dealing with a bank, and the bank will work on it's time frame, and only it's time frame. This type of delayed response would never fly in a seller->buyer transaction represented by agents without bank (or other corporate/legal) involvement, but, because it's the big banks.......it can and does happen......every day.

Sat May 10 2008, 05:18

With the exception of the time-frame, what you have related seems in order. The use of the term "counter" seems out of context too if it was not related to the receipt of a counter offer.

Since the lender has the last say on a short sale, and is losing money on the transaction, low-ball offers are not likely to fly if buyers are competing. They are also often offered at the low end of the market value in the hope of making a quick sale, and you may want to consider offering the list price for any home you really want. Without more info about how the "recently sold home" in the neighborhood compares to a specific home in which you may be interested, it's impossible to say whether your decision is based on sound reasoning.

Sat May 10 2008, 04:49