Feb 6th : original offer
Feb 21st : offer verbally accepted by seller
Feb 23rd : went to the bank
March 2nd : BPO
March 9th : Negotiator assigned
March 20th : signed contract finally recieved from seller
March 22st : MLS status changed from Active to Pending
March 24nd : Short Sale approved closing in 27 days
Total time for bank to approve 4 weeks !!
Hopefully you will get your's approved this week as well Carlos / Pacita, thanks for the updates, and comparison table. I certainly appreciated the company/feedback whilst I waited.
I thought I'd share a comparison table of my own with what I offered on my house compared to the estimates!
My offer was:
2% above zillow estimate
11% above eppraisal estimate
7% above comparable listings
1% above recent sales
And.. my timeline:
February 3rd : original offer
February 5th : offer accepted by seller
February 9th : went to bank
February 16th : BPO's ordered for 1st/2nd - informed that 2 excellent negotiators have been assigned
March 3rd : results came in for 1st BPO (for 2nd mortgage on home)
March 6th : results in for 2nd BPO (for 1st mortgage on home)
March 9th : agent calls me to say that we should hear the news within 2 weeks!
I spoke to my agent today and she said that it should be any day now!! But, both her and the listing agent have no doubts that the bank will come back with good news for me! I'm still praying that I will hear the good news soon..!
Good luck to you whipsawfx!! Keep us all posted! Hopefully we will both be in our new homes soon.
Great to hear the update, we are in a similar boat, been told will probably be a couple of weeks from here..Here are some numbers as our offer is substantially lower than yours, be nice for a comparison, since you appear to be priced around where you'd expect the BPO to come in at, or even above !!
21% below zillow estimate,
17% below eppraisal (Carlos link)
14% below comparable listings,
13% below recent sales
7.5% below list price (list prince now reduced 3%)
In our case its difficult to say, as most comps are for bigger homes, but I think we priced our offer fairly. We used the pre-bubble 2002-3 prices as a guide for our original offer, our current offer is in line with those prices also. As regards to BPO's here's an interesting interview (playlist) I came across: http://www.youtube.com/p/EA77A87A1143292B
We started offering 20% below list price, as nothing is really moving in the local market, and most listings have been around for 6 months or more. This is the only property that had become more aggressive with its offer price, coming down 10% to be the lowest priced listing in the subdivision by 7.5%. Took a couple of weeks of wrangling, and walking away before we even discovered that they were settling on our offer which would make the sale short by about $10k. Turns, out the seller is in trouble with their payments, and falling behind a few thousand every month.
In this economic climate, we're pricing our offers realistically, as there is no chance that prices will stop falling for the next year or two ... we're kind of stuck because there are no rental's available, unless you will do condo's or townhomes ... which we wont. Its a tough decision for us as we could quite easily pay the extra $10k for it not to be short, but resisted the temptation as the market is falling. Ironically zillows price estimate has risen by 6% since we made our original offer!!!
In anycase, here's our timeline:
Feb 6th : original offer
Feb 21st : offer accepted by seller
Feb 23rd : went to the bank
March 2nd : BPO
March 9th : Negotiator assigned
Told a couple of weeks from here also,
Good Luck to us all indeed Pacita
I also have two offers on separate short sales. Both of them had been in contract before, but the buyers walked out (couldn't wait). Fortunately for us, that means the short sale process was already begun, and they even have short sale approvals for specific prices. My clients still wanted to negotiate slightly lower prices. The listing agents forwarded the offers, and like you, we're waiting for acceptance. After a long time on the market, and this close to foreclosure, we are hopeful the banks will move a bit faster on the short saes.
Good luck to us all!
The results for the second BPO came in and the bank said they now have everything they need to make their decision! So, the process is done. All we are waiting for now is their acceptance of my offer! Everyone (listing agent, my agent).. is very optimistic and I can't believe how fast it went! My agent called me and said we should know in a couple weeks (if not sooner!) Then after that.. we close within 30 days! :o)
When the seller's agent said that the results for the first BPO (for the 2nd) were great! He meant that it looked good.. in my favor! Or at least.. thats what my agent relayed to me. In other words.. so far.. its looking good! But, now they are waiting for the results from the BPO for the main loan on the house, which should be (hopefully) next week sometime.
I looked up my property on 2 websites to see how they currently estimate the value of the property I'm trying to buy. On Zillow.com the estimate for my house is lower than list price, and it was even lower on Eppraisal.com. This was good to see. I know that they can only account for so much on these sites, but at least, based on data that they are aware of, the estimates were lower than what I'm offering.
I looked up the value of what my home was back in its heyday. Back in 2006, this home was worth $610,000.. and now its worth less than half of that amount. According to public records, it looks like it was sold in 2005 for $595,000. This must be what the current owner paid. Wow..
Pacita - Thanks for answering my question. Actually, what I meant was.. As soon as the bank gets the results back from the BPO('s).. Is it at that point that they either accept, reject or counter the offer? They don't sit on it do they? (Of course, the answer to this question may be different for various lenders... I have a feeling Wells Fargo won't stall..). I'm glad we aren't dealing with someone like Downey Savings..haha. Thanks for your input and encouragement.
Mike - Yes, I own a treadmill... thanks for the tip brother! I've gone through panic/anxiety attacks before.. a long time ago... and I was fine all this time.. Until I made the offer on the house. Then they came back! Amazing... But I'll take your advice.. thanks again!
So.. if, as you say, the home seems overpriced, then chances of the BPO coming back with a higher estimate are pretty much zero, correct? If so, this is good news for me.. as long as the bank does not counter with a higher offer..thats all I really care about!! I could have offered less for the house, but I really want the house and I wasn't entirely sure, at the time, if the realtor lowballed the property or not.. it looks like he didn't.
The reason I want to stick this out... (and it may go fast..who knows?), is because I have always wanted to live in this exact neighborhood (beautiful gated community) in this exact model house. Ever since I can remember its been a goal of mine to get here... and I'm not going to give up. It's only been 3.5 weeks since this has all started.
The seller's agent has experience with short sales and has worked with wells fargo before and he says that they are supposedly quick and on top of things! So, I'm hoping with his experience, coupled with a market that is still on the decline, the lender will be more than willing to work this deal and not lose more money than necessary!
So far, no unanswered phone calls (at least from my realtor).. not sure what interest rates I've missed.. but I know I'll get a low one.. and I don't believe in medication. I've woken up in the middle of the night with my heart racing though.. (a lil panic maybe?).. this is my first home buying experience ('property virgin' here) and this is the biggest purchase I've ever made!
Please remember that even if the seller accepts your offer, it is not a done deal until the short sale lender accepts AND approves the offer.
If another offer comes in that is better and higher than yours, the listing agent is obliged to present that offer to the seller and the loss mitigator. The seller stands a better chance of gettting a short sale offer accepted/approved if it is to the lender's best financial interest..
Pending show for back up (which means there is an ACCEPTED offer) is NOT he same thing as pending subject lender approval (which means the lenders still haven't accepted the offer).
Ordering the BPO is a step in the right direction --- but BPOs are primarily drive by estimates/appraisals. On some of our short sales, We have challenged the BPOs done by agents who were not aware of, or didn't bother to ask about the condition of the properties that would have resulted in lower estimates. Fortunately, the loss mitigators we were dealing with accepted our documentation and agreed to lower BPOs.
Did you sign a short sale addendum? What were the terms? You may want to review that document to make sure you know what your rights are.
Good luck Carlos, be patient, it sounds as if its just a matter of a few weeks wait for you
The listing agent sounds as if they are cooperating with you and your agent by showing the property as pending, many times listing agents continue to show the property active until an acceptance by the bank guaranteeing multiple offers. We do a lot of short sales and unfortunately they do take time (I'm still not certain why so much time).
With regard to you offering asking price, my question to you is who's asking price. Again, often times an agent will low ball a property to get several offers and the bank can come back with a counter offer for more money. I am not saying this is your case but I do see it happen every day.
We also see a lot of short sales with 2nd loans but this is common. Most primary lenders will offer the holder of the 2nd a few thousand dollars (maybe $3,000) which is better than nothing because if the property is foreclosed on the 2nd will probably get nothing and it still saves the primary lender a lot of time and money. . Keep in mind that after the foreclosure the banks want to recover as much as the cost as possible so you want to get in before the bank starts spending money.
If you want to buy a short sale you have to have patience but I think it's worth the time and effort.
Foreclosures are easy for an agent because the bank has already gone through the motions and know how much they will take for the property.
We work with large investors and sell foreclosed properties but in my humble opinion short sales can be the best deals. Good luckâ€¦
Jeff and Cheryl Fox
800-917-8080 Toll Free
16133 Ventura Blvd. 7th Floor
Encino, CA 91436
Geez, this is the third "Short-Sale" question I've answered in 15 minutes!! All the "priority buyer", "pre-approval", "sign and agreed counter-offer", "pending show" status dont' mean SQUAT!! The questions should be:
How many loans are secured on the property? 1st, 2nd?
How much are the loans? If you've a 2nd Note it most like is toast! If they don't want to play ball you CAN'T complete the deal no matter how much the lender takes!
How upside down ARE the owners? Short-Sale price vs. the total loans owed?
Who IS the lender? Where are they?
Has the Seller completed a "hardship" package?
Are they IN foreclosure meaning has a NOD (notice of default) been filed on the subject property. If so the clock is ticking on a 122 calendar.
Are they current with the loans? How many months of payments have they missed?
I've heard of some deals being done within the time stated but that's with very professional help, one loan. Multiple loans are a whole new ballgame. And yes, it is to the Sellers advantage to present to the lender as many offers as they can to make it more attractive to the lender. If the lender does NOT accept YOUR short-sale offer your offer is rejected and hence the deal can't be consumated. You're out!
So as I've stated many times before, if you like frustration, the "big-stall", phone calls NOT be returned, interest rate locks coming and going and coming and going, and want to pay MORE for a home, then short-sales are right where you belong. But in our County the facts are clear!
SS days on the market 180, REO (real estate owned or bank owned property) 78
Median sold price: SS-$305,000 REO's: $257,000 A $50,000 Difference!!
Belive me! You'll find another house--it always works out that way!!
Really happy for you that things are working out. Patience paid off, didn't it?
Right now, I have 4 short sales going. At least one of them already had BPOs completed so we are hoping to receive the go ahead next week.
The one that is causing the most hardship has two loans, but the seller is negotiating to give a bit more money to the second lien holder to encourage them to accept the short sale (or lose out completely if the property is foreclosed).
Glad you saw the show --- I actually filmed two episodes, one in Pt. Richmnd, and the other in Alameda. It was fun and I was glad to do it.
Keep us posted when you move in. Cheer!
Well.. its been a long 67 days, but the bank called today and finally approved the short sale!! My realtor said that she will be emailing me the approval letters tomorrow! I can't wait to get them in my hand.. I think that will finally finalize it for me!
I close in 45 days.
My complete Timeline:
January 22nd: Property listed on the MLS
February 3rd : Made my offer
February 5th : Offer accepted by seller
February 9th : Went to bank
February 16th : BPO's ordered for 1st/2nd - informed that 2 excellent negotiators have been assigned
March 3rd : Results came in for 1st BPO (for 2nd mortgage on home)
March 6th : Results in for 2nd BPO (for 1st mortgage on home)
March 9th : Agent calls me to say that we should hear the news within 2 weeks!
March 19th: Lender has conference call with listing agent and seller of home
March 20th: Verbal approval from lender - but nothing in writing
April 7th: Listing agent calls my agent to say HUD had to be re-submitted
April 9th: My agent calls me to tell me the short sale is approved, lender has sent approval letters - I close in 45 days.
Thank you to everyone for your advice, encouragement and friendship in my short sale process! Would I do it again? In a heartbeat! It was a smooth process.. kudos to Wells Fargo for being so fast and on top of things! If anyone is considering a short sale, it can be a long process.. but with some patience and a lot of prayer, it can really work out for the best!
Pacita - thanks for your help and encouragement.. I saw you on HGTV's 'My House Is Worth What?' show.. You were great!!
God Bless! :)
I am waiting on the outcome of three short sale offers (one is my listing). So I'm hopeful whenever i hear of one closing. There are always good stories. I've had my share. Glad you have yours.
I am following your case because it's similar to mine
I submitted an offer for my clients on short sale back in Feb. 10. Several follow ups to the listing agent later, she told me last Friday March 13 that I can tell my buyers that their offer is as good as accepted, and that we should have an answer by Monday.
SHORT SALE PROPERTY WAS IN CONTRACT BEFORE!
Before I wrote the offer, I asked many questions about the short sale. It was in contract before but the buyer backed out because they were accepted on another short sale they liked better, but that they waited for FIVE MONTHS before getting accepted.
Since the property my buyers like was once already in contract, the chances of getting an approval multiplied because we basically offered what the loss mitigator had approved. But they changed mitigators, so it's like starting the process all over again (HUH?).
So here we are, 5 weeks of being "almost there" and still no answer.
I've prepared my buyers on what to expect, and we are continuing to look at other properties --- but on the other hand, we are also hopeful we'll get this one since they really like this house.
Deep breathing helps! Mel Brooks suffered from anxiety attacks for years. He'd start running and keep running until he was totally exhausted! Got a treadMill!!?
The second concerns me. They are most likely toast but if the same lender it is almost like one big first. A second with another lender is problematic. It really doesn't matter if the first says they'll totally cooperate, if the 2nd balks and many do, you're dead. I'm sure your agents have related this to you. We've had 2nd's who are toast refuse to cooperate and the deal just stalls and dies. I don't know how your agent can call you and say the BPO for the 2nd was "great"? I would think the critical BPO would be for the 2nd rather than the first as they are in the most precarious spot in all of this with the most to loose. Perhaps the home in Brentwood you love so much did not get nailed by the downturn as severely as the newer areas. We're all rooting for you Carlos!
Things do sound very encouraging....and glad that things are moving along, albeit, very slowly, for you. Hope that when your realtor says "the results are great" that means they anticipate that the loans will be approved.
YOU ASKED: Do banks either approve or reject the offer right after a BPO is done?
As for whether the bank will reject an offer after a BPO is done...it all depends on the BPO. I've challenged a BPO when I can produce evidence (like estimates for repairs, home inspections, etc) that the property is worth less than what the BPO states. Fortunately, the loss mitigator accepted the information from the local expert (me) than what the drive-by estimator BPO provided.
TWO LOANS? Same lender?
The mere fact that there are two loans explain why this is taking a long time (although it is normal for a short sale process to take a minimum of 45 days after an offer is submitted before the loss mitigator provides an answer of accept, reject, or counter offer).
That is why when showing a short sale listing, we always ask:
1) how many loans are there?
2) if more than one, are there two separate lenders? (if the same lender, the chances of getting approval improves)
3) has the lender already communicated to the listing agent and seller the minimum they will take? (Some lenders will give the listing agent a target figure that the bank needs to net, and from there, we estimate the closing costs, etc. and tack those on the possible price the lender will accept)
There are some lenders I personally shy away from, most notably Downey Savings who typically sells their notes to another bank like Deutsche Bank, and they're not interested in accepting short sale. Even the loan expediters I know will not accept a file if they know that the lender is Downey.
Good luck to you and hope that you will have really good news, soon!
Well.. my realtor called me and we got the results back from the first lender ordered BPO. The owner of the home has a 2nd on the house. The BPO was done for the 2nd and the seller's agent called my agent and said that the results were great...and it looked good! She said that this looks really positive so far and now we are just waiting for the results to come back for the BPO on the 1st (main) loan, which should be within the next week. She said thats going to be the most important one to determine whether they approve my offer or not! BUT, she said that with home prices falling the way they are.. she can't see how they would appraise for anything really much higher! So, this is really encouraging.
Q: Do banks either approve or reject the offer right after a BPO is done?
But anyway... we'll see. So far, its lookin good. I'm praying that they will get the results from the final BPO and approve my offer.. and I'll be in my home soon! My agent told me that banks (especially wells fargo) are really fast with these short sales now.. and they have to be.. with so many of them, they are forced to have a procedure to deal with them now! The seller's agent told my agent that he has 2 excellent negotiators working on this for us! I thought that was excellent news!
And yes.. still waking up at 2am with a racing heartbeat.. I don't think I realize the stress this homebuying process causes, but unfortunately with me, it comes out in the form of anxiety..and its always at night too!! I hate that!!
I watched that HGTV show "Property Virgins" last night and the prospective homebuyer was waiting for Sandra (host of show) while she was working on getting the homeowner to approve their offer. The guy said "This is really stressful.. I'm stressing out".. and they only waited a matter of hours.
I've waited 5 weeks already.
Beware of any national speaker talking about real estate in major generalities!! All real estate is local. All buyer's are convinced this IS a Buyer's market but in reality, at least in my area, the banks have the hottest SELLER'S market which rivals the greed based days of a few short years ago. We have a months supply of REO's which are going for OVER asking with Multiple Offers! The Short-Sales have over a 7 months supply. Donald Trump should keep his mouth shut. I do think this is THE time to buy for many. Some are lambasting FHA for still making loans to folks who don't have the huge fico scores which garner the perfect Interest rates but folks need to keep in mind we now have 50% LESS DEBT!! Our affordability in Sonoma County went from a low of 7% which rivaled Santa Barbara's meager numbers but is NOW at 48%!!!
Just keep your local numbers in mind Carlos and we'll keep you in our prayers you get the home of your dreams. But even if you don't get this one Carlos, I can tell you after 30 years in the business that another equally gorgeous home is right around the next corner!! Keep-Keepin' On brother!!
Mike - I'm definitely still keeping my eyes open for any REO's or opportunities in the same neighborhood! Considering my offer price is at the upper end of area comps... I think I have a great chance of getting this home! I just hope that whoever the listing agent is working with at Wells Fargo will get back to us soon! I'll keep you informed of everything.. at least I'm sleeping better now!
Kaye - What are extensions? Your right.. its all about dealing correctly with the right person in loss mitigation. Since I made my offer on the house a month ago, I've done so much research on short sales, my head is spinning. I have to say though that the only frustrating part of a short sale is the waiting... and wondering if they are going to accept the offer or not! (I think thats the worse part) And.. hoping that I won't have to wait 4-6 months to close or hear an answer!! But, other than that.. its been a fairly easy and smooth process so far. Whats your opinion on my situation.. considering that my offer is at the higher end of comps in the area? In your experience and opinion, do you think its likely that the bank will still counter in our current market... even if my offer is a fair market value (considering nearby comps)?
Donald Trump was in the news recently saying that this is the best time for everyone (who is able to) to go out and buy a house.. because, at this time, YOU can make the banks an offer on a home and considering the current economy and housing condition, they will most likely be willing to take it! (Hopefully he is right)
(BTW - Thanks for everyone's input.. its appreciated.)
The latest Stats from my marketplace of Sonoma County is that short-sales (SS) represent 43 of the 307 sales to date for February or 14%. Days on the market (DOM) is creeping up to 191 and median price of $310,000.
Foreclosed bank owned properties (REO-real estate owned) however represent 188 of the 307 sales to date for February or 61% with a DOM of 76 days and a median rice of $250,000. So once again the question needs to be asked; Why would you want to take over 6 months on average to get one of these to close, then have to pay MORE!?! Also, how many interest rate did you miss! How many phone calls went unanswered and what kind of stress medication are you now taking!!
The more interesting number is the 75% of the total sales which are NOT buying up when they sell! That's NOT healthy!
My agent just called me and told me that the bank already ordered the BPO (3 weeks after I submitted my offer). So, my agent says thats a good sign that they are definitely moving through the process!! I spoke with another realtor in the area who I know and he did an area comp check for me. He found all the homes in my area (with the same square footage) and checked what they are selling for. He said that out of 80 listings with the same square footage (same size) home as mine.. only 5 are priced above the list price that I offered. So, according to him, my home is priced at a very fair market value! So... now the wait begins for the bank to approve the deal! I'm praying that they do!!
A lot of the information given is great. In answer to your question, if the listing agent put "pending, show for backup" it means they can take other offers as back up to yours if yours does not get accepted. The listing agent has to list the property for its fair market value, since the bank will be doing an appraisal or BPO (Broker Price Opinion) to determine the fair market value. If the realtor and the bank are close on value then it is a good thing. However, if the listing agent priced it to low, the bank will reject the offer and go to the back up offers if they are higher. Hopefully the listing agent did their homework.
Let me know if that helps or if you have any other concerns or comments.
It really depends on a number of things. Is the owner behind on payments? Do you have an experienced listing agent who knows the in's and out's of short-sale and negotiating? Is there a negotiating party involved? Has the short-sale already been approved by the bank maybe by a prior offer or offer that fell out? It could be a "normal" escrow closing or perhaps can take as long as 3 months or more.
The key is to make sure to anticipate the waiting game. If you are patient and really want the home, it could be an incredible deal! Keep in mind, you don't have to accept the banks proposal, you may even counter their counter. That tip alone could be worth THOUSAND$$$$ ! I'll send the bill later! Just kidding! Congrats!
Joe Mendoza, Broker
Top 1% Nationwide
"Who's Who In Real Estate"
Short sales do take longer close HOWEVER IT REQUIRES seller lender approval all. Undetermine what part of those procedures have been completed via listing agent or seller. If you dont receive a response from bank within 7 days of executed contract I would have concerns.
If status been moved pending then eliminates other realtors interest in property show to their buyers, you are in a better position.
SPEAK with you buyers agent prior to expense of inspection and appraisal prior to bank approval
However I would "keep my eye out " for other properties which may interest you as a back up plan