Home Buying in 55125>Question Details

Bonnie, Home Buyer in Woodbury, MN

Short sale opinion, please! We put an offer on a short sale on 5/29/08 that was signed by seller in 2-3

Asked by Bonnie, Woodbury, MN Wed Jul 30, 2008

days. We learned the 2nd mortgage ok'd the deal by 6/5/08 and the 1st mortgage was 'going along well'. Apparently the 1st mortgage was sold from Capitol 1 to another bank - ? As of today 7/30/08, the BPO has still not been done. Seller's agent says she is calling the bak daily to no avail. Our agent has little experience with short sales. Should we be worried and bail out? How long until we should expect the BPO to be done? Thanks in advance!

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Susan Hofflander’s answer
Hi, fellow agents!
Just in case you didn't see the date, this question was asked in 2008. As we know, SOOO much has changed about short sales in the 5 years since this question was posed.
1 vote Thank Flag Link Fri Aug 2, 2013
Short sales use to take 30 -45 days from executed contract to close. Today they are taking much long banks are extremely overwhelmed short of staff. I would recommend to keep looking you can submit other bids on properties SO IF this does not work out you not lost time. NOTE: All foreclosures/ short sales I have been a listing/buyers agent they always have drama. It has nothing to do with your agent(s) the bank
http://www.lynn911.com http://www.homes-for-sale-dallas.com
Web Reference: http://www.lynn911.com
1 vote Thank Flag Link Wed Jul 30, 2008
The banks are responding much better than used to be. It is no needs to call to the bank every day,
the seller's agent needed to call a "right" people, perhaps a management of the bank to get the answers.
0 votes Thank Flag Link Mon Feb 10, 2014
Bonnie,
The lender who owns the home is in control of when they answer any questions or send an agent out to do the BPO. Your agent and the listing agent can not move things forward at a faster pace. Most short sales take time. If you are still interested in this home continue to wait. It can take months to get to the finish line. In the meantime talk to your agent and continue to look at other possible homes. Your contarct to purchase this home may have a deadline posted for a response from the bank or a fixed closing date. Contact your agent and ask.
0 votes Thank Flag Link Fri Aug 2, 2013
Hi Bonnie,

I have worked with successful short sales and UNsuccessful short sales. My advice is, hang in there, but keep searching with your agent.
I recently had a rough experience where I was working with a buyer client on a short sale (US Bank 1st mortgage and US Bank 2nd mortgage). We offered on the property in November, 2012. The BPO was done fairly quickly, then...nothing. The listing agent has closed many successful short sales and said that on this one our offer was gridlocked. Finally, by mid June, 2013 we had approval from the 2nd mortgage (US Bank), but not from the 1st. They needed to perform another BPO because the first BPO had expired. The BPO came back at the end of June at $60,000 higher than our offer price, btw we offered full list price. I was preparing my client for the uncertainty of short sales all along, but as you can imagine, she was still pretty bummed.
In conclusion, hang in there, but don't start buying new furniture quite yet :)
0 votes Thank Flag Link Fri Aug 2, 2013
Dear Bonnie,

It must be very frustrating and even frightening for you. This is a very big purchase! If your agent is a licensed Realtor, his broker should be assisting you both through the process, training your agent and answering questions you have. Don't be afraid to request more guidance.

But a quick answer is, don't be surprised if the process takes 6-12 months. I usually don't encourage my buyers to put in offers on short sales- because they can come up short for everyone! There are many places where the process can break down- including you getting a loan! Foreclosures are a little bit better to work with, but there are still a lot of really nice houses available for good prices and more importantly- if you can get a good interest rate it will save you a lot!

God bless you,

Carolyn Jass, Realtor
Twin Cities Real Estate, Equal Housing Opportunity
651-344-6226
carolynjass@live.com
0 votes Thank Flag Link Mon Jul 22, 2013
Bonnie- To answer your question about whether this house is worth the hassle and extra effort I would like to know if your agent performed a comparative market analysis on this home prior to placing your offer. It appears to me that with similar properties selling for the 305k range you are not getting a deal worthy of the extra steps. The property tax value of a home has little to do with the price it sells for on the open marke, I have seen two very similar homes on the same street built by the same builder with a great deal of difference in their property tax assesment . The only way to determine what a house is truly worth is by direct comparison to similar properties both currently on the market and those that have recently sold.

Eric Engdall
0 votes Thank Flag Link Thu Jul 31, 2008
Thanks for all of the great opinions!!

To further make this a tough decision: the house has a property tax market value of $360k but was on the market as a private/regular for months listed at both $350k then $320k without a buyer. The listed short sale asking price was $298k and we offered $290k. Similar houses on same street have recently sold for ~$305k. The house need all new kitchen appliances and carpeting throughout and the basement is not finished. Is this really a deal?
0 votes Thank Flag Link Thu Jul 31, 2008
Hello, Bonnie!
Yes, unfortunately, the banks have not yet caught up with what they need to do to make this process go more smoothly. They are inundated with sometimes 10s of thousands of short sale requests in one week. Yet, nobody at these banks seems to see that they need to revamp how this process is handled. They are still working as they did when short sales were not that prevalent and do not have adequate employees to handle the deluge. I have a client with a short sale offer sitting on the table since May 17th and still no answer from the bank. Sheesh! It's only further complicated when the bank has "dumped the debt" and sold the mortgage. Good luck.
0 votes Thank Flag Link Thu Jul 31, 2008
I feel for you Bonnie. These short sales seem to almost always be nightmares. I have worked with several of them, and most have been very straining on my patience. I did see a statistic in Realtor Magazine the other day that was a little alarming in regards to short sales. I cannot speak for its accuracy, as I personally didn't do the math, but it is something to think about.

“A speaker at a short sale seminar I attended said 80 percent of all offers on short-sale listings do not result in a closed escrow. Combine that with an escrow of 90 days or more and the lack of cooperation from lenders and you can see why most practitioners will avoid representing buyers in short sales”
Quote from Stacey Moncrieff's Article in August Issue of Realtor Magazine Pg.6
Web Reference: http://www.stcloudedina.com
0 votes Thank Flag Link Thu Jul 31, 2008
Hi Bonnie

Good luck! How far you want to go with this is directly related to your urgency and the actual value of the home to the buyer. If they are passionate, then sometimes it is worth hanging in there however, just know that these banks have STILL not set themselves up in a position where they effectively approve short sales in a timely manner. It's next to impossible sometimes.

Know this, keep calling and insisting that something be done. Make sure you are speaking to the right person (usually they hide behind about 2589 assistants!) You have to be relentless. Make sure the property is worth it.
0 votes Thank Flag Link Thu Jul 31, 2008
Bonnie- As the previous agents have stated, purchasing a property which is a short sale status requires jumping through a few hoops. The sellers agent will influence the success of this process by the way in which they handle speaking with the sellers creditors. Once the sellers client has filled out the paperwork which allows the agent to speak to their creditor on their behalf they should contact the loss and mitigation department of those creditors to begin the proper dialog to ensure a positive outcome. Each and every time the sellers agent speaks to those lenders they should be certain to obtain the full name of the representative they speak to as stories can change depending on who you speak with on any given day. In regards to your thoughts of bailout ask yourself if this slight inconvenience is worth the thousands of dollars you will save by purchasing a short sale property. My last bit of advice to you is if indeed your agent has little experience in short sales they consult with their office manager for assistance throughout this transaction. Best of luck!!
Eric Engdall
0 votes Thank Flag Link Thu Jul 31, 2008
Bonnie,

Be patient, working with short sales and foreclosure can take weeks to even months. Every bank is different, however when you are working with a number of different banks it can even longer. If you love the home, my advice to you is to stick it out and wait. If you are in a bind and need to move sooner, then maybe you do need to bail out. I am not sure who you are working with, but I can tell you from experience that she may call them every day, but when you are working with a large company that is handling thousands of short sales and foreclosures it is very hard to speak to a specific person and get a correct answer. Once the ball starts rolling things should progress at a faster rate. If you are getting the home for a great price...be patient it will be worth it in the end. Good Luck to you!
0 votes Thank Flag Link Thu Jul 31, 2008
I am dealing with a very similar situation in Dallas and I am the listing agent. I submitte the offer to the bank towards the end of May and that banks holds both mortgages which would have been easier. They assigned a rep within 2 weeks of receiving the docs but they still haven't ordered the BPO. I prepared one and sent it to them in case they want to consider it, although I know they should get one from a 3rd party. This is the end of July and still no word. I call them every 2 days and I get the same answer. It's in the works and it's not on the foreclosure list. I am very surprised that the buyer hasn't walked yet. The owner and I have been calling them... I know they're swamped but...

It would depend on how much you like the house and how good of a deal you are getting. Once the BPO is ordered, they can get it within 24 hours...

Naima
0 votes Thank Flag Link Thu Jul 31, 2008
Hi Bonnie,
Submitting offers on multiple homes and (possibly) having more than one of them accepted at the same time opens up an entire different can of worms....

If this is the home you absolutely love then you might try to wait it out. Otherwise you might want to consider canceling the purchase agreement and look for something else.
Web Reference: http://www.thegoheens.com
0 votes Thank Flag Link Wed Jul 30, 2008
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