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Martin, Real Estate Pro in San Leandro, CA

WHAT HAS BEEN YOUR EXPERIENCE WITH YOUR SHORT SALE LISTINGS? ANY GOOD COMMENTS REGARDING LENDER'S RESPONSE TO?

Asked by Martin, San Leandro, CA Fri May 9, 2008

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On the buyer side: I personally think there is a combination of the listing agent, how seasoned the listing agent is and how persistent that listing agent is with the bank or mitigation department. It also depends on how much prep work was done prior to having the property entering into a short sale.

On the listing side: I draw on my experience from working with REOs (which is what really happens after a failed short sale), I see that prices for short sale homes were way out of the market price when they were listed and in no way comparable to other listed properties. Maybe that one was an extreme case, but it seems to hold fairly true for a majority of the ones I've seen.

When I price homes for short sale, I price based on a BPO (broker's price opinion). I know some banks have another broker do the pricing, which is fine, but it shouldn't take months if the bank already knows what to do and the buyer has already shown hardship.

There is a lot of misinformation out there, especially in the market that we're in. Short sales are sometimes treated by listing agents as regular homes for sale. And buyers are unaware of the process so it makes it frustrating for those being blind and for those following the blind.

Anyway, that's my frustration with short sales -- it's basically people not getting or giving the right information.
1 vote Thank Flag Link Sun May 18, 2008
Frustratingly slow! That's pretty much my experience, both on the listing side as well as the buyer's side. From the very beginning I set expectations that although there are a lot of homes for sale that are now more reasonably priced than they were 2-3 years ago, many are short sales and foreclosures. I try to educate them on the process.

I give my clients as much information as possible on all properties within their budget range to include short sales and REOs. Not all REOs are trashed, and we've found a few that are good deals in terms of price and location.

Because it takes what seems like forever to get a negotiator assigned to a short sale, I tell my clients that we should continue looking in case there are better deals that may come up. After several agonizingly long weeks waiting for responses, some of my clients are now opting to bypass short sales and we are moving on.

Best.
Pacita
0 votes Thank Flag Link Sun May 11, 2008
Martin:

I agree with almost everything Susan said, although I do feel that REO's offer an important value. My only concern with Short Sales are that they can extend the period your client (buyer) is waiting for confirmation of an accepted offer. Rather then a response in a week in some of the more extreme cases a buyer can wait up to 30 days to hear whether or not the lender will approve the sales amount.

This creates frustration for a buyer who is anxious to preceed with their loan application and give notice to their current landlord, or even worse if they have a house of their own which is either sold or pending.

In both cases Short Sale & REO the buyer typically is buying the property AS IS, and inspections are often at the cost of the buyer. In REO many banks are agreeable to paying closing costs, where in a Short Sale that burden would be the seller's responsibilty and they obviously are not likely to afford those benefits.

As a wrap up - the buyer needs to be informed about the pros and cons to both avenues of purchase, and it must always be the buyers decision which way to proceed.

Best,
Andrea
0 votes Thank Flag Link Sat May 10, 2008
It is very important to understand some simple information in regards to short sales. Most of the top lenders are very willing to work with borrowers in a short sale situation providing they work with someone in the loss mitigation department and use the correct forms and follow some simple guidelines and requirements. Using a Real Estate Professional that is experienced in this field is extremely helpful and can make the difference in success or failure of a short sale. Definately much better for the borrower in the long run than a foreclosure.
0 votes Thank Flag Link Fri May 9, 2008
It depends on who the lender is - some are easier and faster to work with than others. In ALL cases it is critically important to submit a complete, well organized file all at one time in the way the lender wants to see it and to follow up regularly and professionally. Prequalifying the viability of the short sale in advance helps, and, needless to say, pricing the property properly and marketing it effectively are important as well, as you may need to sell the home 2 or 3 times before getting lender approval. Good luck, and let me know if there is any other info you need.
0 votes Thank Flag Link Fri May 9, 2008
Really doesnt matter if your dealing with one bank or two...I've dealt with both and they take the same amount of time. Figure 50 days to get a BPO appraiser out there. If your buyer wants to wait that long then there is a good chance it may close if the loan is purchase money and there's been serious hardship. Good Luck.
0 votes Thank Flag Link Fri May 9, 2008
Response from Lender is all over the map. Some will return calls and you are able to work with them, but then there others that will not return calls no matter how many times you call them. I have sent in an all cash offer to 3 diffrent lenders and todate I have received an answer. But then I have sent in offers on others and they have responded very quickly.
0 votes Thank Flag Link Fri May 9, 2008
It's been a mixed bag and depends a lot on which lender you are dealing with and whether you are dealing with a senior or junior lien holder. I have had case workers who tried to work with me and others who had a total take it or leave attitude. I have lost buyers because the bank sat on the full price offer too long and then they demand that the seller sign a note for the full deficiency not considering that a higher offer was lost because of their slow response. The best thing you can do is keep calling the loss mitigation department. The squeeky wheel gets the grease (eventually).
0 votes Thank Flag Link Fri May 9, 2008
Ute Ferdig -…, Real Estate Pro in Newcastle, CA
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