Home Buying in Sun Prairie>Question Details

Jody Christo…, Home Buyer in Sun Prairie, WI

What is the advantage to the banks for waiting so long to move forward on short sale offers? think they would want to get their properties sold.

Asked by Jody Christopherson, Sun Prairie, WI Tue Jan 1, 2013

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I had a Bank of America short sale listing of mine close this past Friday afternoon. When speaking with the Bank of American representative involved, she mentioned that I was one of 20 short sale closings that she was dealing with on that day alone.

Sure, it was end of month and also end of year... but it gives you an idea of what sort of volume these negotiators are doing.

Regards,
Michael Collins- SFR, BPOR
Broker
Rock Realty
608-921-8536

My Trulia Blog:
http://www.trulia.com/blog/RockRealty/
1 vote Thank Flag Link Wed Jan 2, 2013
I would think so too! Yes, they need to make sure they are getting close to the fair market value for the home, confirm the seller can no longer afford to pay the mortgage and so on, but I agree that they are ridiculously slow. If all the i's are not dotted and the t's not crossed they refuse to move forward. I had a short sale recently held up for 10 weeks because the BANKS appraiser listed the address as '123 main street' rather than '123 WEST main street'. I wish I could give a better reason but there really is none. Hang in there, it will get done, it just takes patience, extreme patience.
1 vote Thank Flag Link Tue Jan 1, 2013
Advantage may be the wrong term, first you should not that a bank only loses money on a short sale, they are in no hurry to take a loss. The second problem is they are still over loaded with short sales and do not have the staff to move any quicker. Lastly many short sale listing agents have not completed the process and or forms properly. Many short sale packjages are incomplete of they underpriced the home to attract more offers and they do not meet the banks guidelines causing further delays.. Where the home owner as PMI, the bank is often insured in the even of foreclosure but niot a short sale unless the PMI company agrees to take a loss up front which takes additional time to run teh short sale through the PMI company. So it is not just not wanting to do a short sakle but a whole porcess that must be done right the 1st time. I have had short sales approved in a little as 3 weeks but the average remains 60 days for approval and 90 days to close.
0 votes Thank Flag Link Wed Jan 2, 2013
It's not that they want to take a long time to approve the offer, but the bank has to verify that the buyers offer is acceptable. Typically the bank will order an appraisal or BPO on the property to get an idea of the value. The only reason it takes as long as it does is because you have to wait for the appraisal or BPO to be completed and then you have to get a response from the banks negotiatior.

The process can also be delayed if there are 2nd and 3rd mortgages on the property or if the property has any liens against it. Prior to putting any offer in on a short sale property I would find out how many mortgages are on the property, and with whom and then I would also ask if the property has any other liens as well. The more mortgages and liens agains the property the longer the process can take and the less likely it is you will ever get your offer accepted.

Hope this helps and good luck.

p.s. here's a link to a quick article and video on how to negotiate a home sale and one of the things you can do to when dealing with the banks negotiator.
http://www.strategicrealestateteam.com/2011/09/22/psychologi…
0 votes Thank Flag Link Wed Jan 2, 2013
As a short sale specialist, I have to agree with both previous answers. In addition, we have to remember that the banks are not equipped to handle the influx of distressed properties. Very often, if the listing agent hasn't included everything in the order it is requested or if they are not sending it the way in which it was requested, the banks do not even respond. You are usually given one chance to do it correctly and if you don't, it will end up on the file pile behind their desk.

And as Suzanne has already said, there is much research to be done to convince the end investor that this is the best deal for them. I don't believe that the banks are deliberately holding out. That would ludicrous in and of itself. However, I do believe that they need more trained people and a much more simplified method of processing these files.

My average in getting short sales completed has been 6-8 weeks. Although I am working on one right now that is becoming a problem because I cannot get the negotiator to respond to my requests. This will then result in my having to go above her head and most likely cause yet another delay.

Short sales should have been named looooooooong sales.
0 votes Thank Flag Link Tue Jan 1, 2013
What you are saying is for the bank to hurry up and agree to lose that money. You want the bank to more quickly lose more money. Now really, does that sound prudent and do you really think a bank is eager to lose money? They are slow and methodical and they have meetings and more meetings and they have to justify the loss and verify it , then verify it again. It can be a slow process. Banks are not like normal sellers.
0 votes Thank Flag Link Tue Jan 1, 2013
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