Home Buying in Vero Beach>Question Details

dexmabel, Home Buyer in Vero Beach, FL

Short sale gone south.

Asked by dexmabel, Vero Beach, FL Sat Apr 7, 2012

I put in an offer for a short sale which was accepted by the seller. The bank came back with a counter which was way out of my price range. Very disappointed. I am steering clear of short sales from now on. I guess you could get a deal somewhere, maybe over the rainbow.
I am continuing to look at anything but short sales and have been doing so even when I made the offer.

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BEST ANSWER
Dexmabel,

Short sales have to be approved by the short sale lender. An appraisal and BPO typically will be ordered by the short sale lender. If the pricing of the home is too, low the short sale lender may deny the short sale or counter the sales price.

Your real estate agent should be able to conduct research, called a "Competitive Market Analysis" or CMA, on comparable properties, to help you come up with an educated opinion on the worth of the property. If the short sale is priced too low don’t assume the short sale will be approved.

I represent many buyers who have successfully closed short sale listings. Knowledgeable buyers can present an offer that will be approved by the short sale lender. Best wishes in your home search.

Thanks,
Carol Perdew
Prudential California Realty
(209) 239-7979
Carol@PerdewHomes.com
http://www.CentralValleyHomes.com
DRE 985176
0 votes Thank Flag Link Sun Apr 8, 2012
Good move on your part. I have never closed a loan for one of these puppies. Foreclosures can be tricky as well, although I have closed many loans for buyers of an REO.

Jim Simms
NMLS # 6395
JSimms@cmcloans.com
Financing Kentucky One Home at a Time.
Web Reference: http://jamessimms.com/
1 vote Thank Flag Link Mon Apr 9, 2012
Sorry to hear of your frustration on a short sale.

I posted a blog recently that is an actual Q & A to and from a client regarding a property he had offered on before it became a short sale. Gives some insight into who controls what, and important considerations for a buyer and a seller contemplating short sale.

http://www.trulia.com/blog/jimsweat/2012/03/actual_short_sal…

It won't prevent you from future frustration, but it does show why the answer you get doesn't make any sense to you.

All the Best,

Jim Sweat, ABR, CRS, GRI, CDPE, e-PRO, ILHM
Realtor
Sandals Realty
http://www.ExplainShortSales.com
941-306-7384
Team@JimSweat.com
1 vote Thank Flag Link Sat Apr 7, 2012
Short sales can be frustrating, take longer to close, but can be rewarding for the buyers. The banks are now more inclined to go the short sale route than going through a costly foreclosure process. If you are not under pressure to purchase a property, work with a qualified Realtor that knows the process and who is working with an experienced negotiator, a short sale can result in a great deal. I would not recommend forgoing shorts sales in your quest for a good buy. If you need more information on how to successfully negotiate through a short sale do not hesitate to contact me at john@veroflrealestate.com.
1 vote Thank Flag Link Sat Apr 7, 2012
Short sales can be slow and sometimes the bank's answer may not seem to make sense. The bank's goal is to try minimize its loss in a short sale. Before accepting your short sale offer, they will usually get two price opinions from real estate brokers or appraisers. So when making a short sale offer, the contract price should be close to the prices the bank will be looking at when it does its price analysis. At times a low ball offer will sneak through the bank process, but usually low ball prices are rejected or countered at close to market price.

Whenever making an offer, make sure your real estate sales associate has reviewed the comparable sales and listings with you so you know approximately what the bank is likely to want in sales price.
1 vote Thank Flag Link Sat Apr 7, 2012
Hi Steven- The price i offered was close to what the seller was asking but, the homes in the development are considerably higher than what I offered and what the seller was asking. I figured the bank would counter back but wasn't really prepared for what they asked for, it was higher than what the asking price was. Thanks for the response
Flag Sat Apr 7, 2012
Short sales are sometimes priced at market value that the bank will accept. Sometimes the house is priced well below market value and the bank will not accept the offer as a short sale. My advice is that you work with a Realtor who will "run the comps" for you so that you know your offer is viable. Short sales can sometimes be frustrating but they are usually very good buys. Banks are tending toward short sales in Florida versus the foreclosure route whenever possible these days because foreclosure is time consuming and costly. Short sales are also much less damaging to the seller's credit scores, so a win for the seller, a win for the bank and a win for the buyer.

We would advise that it is not a good idea to avoid short sales. Feel free to contact us at ginny@MyVeroBeachRealEstate.com. Good luck with your search.
1 vote Thank Flag Link Sat Apr 7, 2012
Dex,

The problem may not have been one caused by the short sale process or the bank but one created by the listing agent and compounded by your buyer's agent.

The reason the lender countered with such a high offer is that the property was under priced to begin with. Who creates the original asking price? The lender has nothing to do with it but the listing agent with agreement of their seller established the price.

Unfortunately, you were the victim of being drawn in to a price that was too good to pass up...but a price that was not an accurate reflection of the current local RE market.

Working with an experienced buyers agent that is familiar with your target location should be able to guide to and away from short sale opportunities. Before I place an short sale offer, I make darn certain the asking price is one that is close to reasonable.

My recommendation is to not scratch this portion of the market but begin working with an agent that really knows their stuff.....

Good luck,

Bill
0 votes Thank Flag Link Sat May 12, 2012
Actually the listing agent and the seller agreed with the price and subsequent offer I made. It was the bank that disagreed with my offer. The price was reasonable according to the comps. in the area.
Flag Sun May 13, 2012
Congrads on getting the lesson. Short sales can be nice if... 1) The selling agent is well versed in short sales 2) The property has had previous offers on it and the bank has come back with a sales price it is willing to accept.
0 votes Thank Flag Link Sat May 12, 2012
Are you working with a realtor? I would be happy to show you anything available (excluding short sales since that is your preference) that meets your criteria. Please contact me at 772-713-9159 or ABHarris84@yahoo.com if I can be of asistance to you.
0 votes Thank Flag Link Mon Apr 9, 2012
Thanks for all your answers. I am going to look for a home that is not a short sale or a foreclosure.
I guess i don't understtand why the banks are allowed to get away with all these shenanigans but they obviously do. For my part i just want something straightforward.
I keep hearing all these stories of people getting such great short sale deals. Perhaps these are just stories or fairy tales.
0 votes Thank Flag Link Sun Apr 8, 2012
Dex,
For too many reasons to list, less than 30% of listed short sales close as a short sale.

I just completed the number crunching for the 1st quarter of 2012 and the stats mirror those of 2011.
Choosing to put an offer in on a short sales is choosing to be on the team that loses 70% of the time. The average saving, when compared to traditional resale is approximately 20%. But, that is only realized if you are not on the team that loses 70% of the time.

Just recently I represented a buyer, who was thoroughly advised this is a bad idea, but the home was the only one available. There truly is a growing shortage of quality homes.
Listed at the reccomendatation of Bank of America at 700K
Seller offered 800K which was accepted by the owner, but the bank countered with 800K plus 100K for debt reduction (i.e. investor bribe) that will not appear as purchase price. (House price now at 900K)
Buyer agreed.
Investor then comes back with $1.5 Million as purchase price.(90% of Bank of America's mortgages in FL were sold to investors. The idea the 'bank' is losing money in this crisis they caused is false)
Buyer offers 1 Mill even, a 300k increase over list price.
Bank and Investor reach agreement.
Seller (owner) doesn't like deal and tax ramification. No deal.
Five months down the drain.
The losing team gets the predictable outcome.

Dex, knowing this scenario plays our thousands of times a month across the country resulting in an average of 271 days wasted, an exhausted buyer and real estate professionals being placed in an extremely compromised position, how would you have responded to the following:

Your agents says, "I'll show you any home that is for sale. Traditional resales, new construction, bank owned and short sales. However, when it comes to short sales, because only 30% actually sell as a short sale, we need to understand the futility of this effort. Let me help you with acquiring a new home, If you choose to make an offer on a short sale, a non-refundable deposit is required which will be applied to the closing cost of any home you buy through me."
Would you 'run for the hills'?
Find a new agent?
Recognize the reality and skip shorties or pay to play?

I seriously look forward to your response.
Annette Lawrence
Broker/associate
ReMax Realtec Group
Palm Harbor, FL
727. 420. 4041
0 votes Thank Flag Link Sun Apr 8, 2012
You may be able to build a brand new home, especially with the incentives out there. Give me a chance to see if we fit. I can get some answers quickly, we maybe able to get you what you want with the payments you want and best of all you get to pick out the colors & options. We have homes from the 120's to the 220's. Send me an email or go to the link below. st.martin@maronda.com.

http://www.marondahomes.com/single-family-homes/treasurecoas…
0 votes Thank Flag Link Sat Apr 7, 2012
What are the HOA's?
Flag Sat Apr 7, 2012
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