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Asked by Alyssa, Manchester, NH Fri Aug 22, 2008

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Answers

7
Steve Kappre, , Gloucester County, NJ
Thu Oct 9, 2008
I know this doesn't help, but i've seen banks take 2+ months to get back. You often wonder if they really care to sell houses sometimes ... I know they have loses to try and minimize, but they can't benefit from paying several more month's worth of taxes, etc. Good luck
Web Reference:  http://www.stevekappre.com
0 votes
Kevin Vitali, Agent, Tewksbury, MA
Mon Sep 8, 2008
Unfortunately this is quite normal. When it comes to the banks there is no common sense used. The short sale process can be quite long and if you do not have months to wait than the short sale may not be for you. Usually the buyer who has the most staying power gets the property.

There are many variables when doing a short sale. One is how adept the listing agent is at short sales, the assigned negotiator, bank policy and so on. Many times if you are dealing with a listing agent that knows there way around shorts sales you can stop the foreclosure to give you time to negotiate, but again so many variables to navigate.

Buyers need to realize when it comes to short sales and REO's (bank owned properties), any discount is earned in frustration, aggravation and time. If getting that discount that may come with a short sale or REO is important to you be prepared to wait patiently, lose properties and be prepared to have you heart broken a couple of times. A buyer's agent who has experience should be able to explain the process and help you navigate these types of purchases. Again they are not easy purchases and be prepared for high levels of aggravation, frustration and disappointment until you finally close on one.

One last point that should be made... Buyers have a perception that there are large discount to be realized on short sales or REO's. There are many homeowners that just need/want to sell their house and are aggressively pricing their homes with out the aggravation. In most cases, for decent properties, most banks will only give up 5-7% on short sale and REO's are selling for close to asking price. Now the REO's might have to go though several price changes before selling and might eventually become a good deal. In most cases the banks dont give much off the asking price. REO's are truly sold as is and there is no history on the house. It is truly buyer beware.
Web Reference:  http://www.thehousewiz.com
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Scott Godzyk, Agent, Manchester, NH
Thu Sep 4, 2008
Alyssa,

How did you make out?
Web Reference:  http://www.ScottSellsNH.com
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Kathy King, Agent, Farmington, NH
Tue Sep 2, 2008
Hi Alyssa,
If you are looking to close quickly, a short sale is not for you. If you absolutely love the home then hang in. The last short sale that I closed took 4 months from list to close. Sometimes it takes longer. The problem with waiting until it forecloses is that sometimes the owners strip the home of appliances, light fixtures etc. or get so angry that they vandalize the property. Another problem is that the bank is so slow at foreclosing and securing the property that the pipes freeze and there is water damage etc. I have found that banks are willing to negotiate but it's on their time schedule.
Good luck.
0 votes
Dane Hahn, , 34223
Sat Aug 23, 2008
Hi Alyssa,
Short sales are risky. You are dealing with two or three seller/decision makers. The former owner/seller usually has little or no motivation to sell to you (they are selling for less than they owe, so they are getting nothing--in fact are losing their house--and mostly they are just trying to stay where they are as long as they can.) The lawyers who may have some involvement are in it for the lawyers who may have some involvement--and don't care when or to whom the house will be sold. The bank/mortgage company wants their money, but have to abide by stringent rules and regulations as they take over the ownership of the dwelling.

If you have cash to spend, you will wonder why you can't get people to just take your money.

And you might find that the bank will turn down more money from you now than they will get when they finally sell. It has to do with lack of emotion on their part. They are swamped with people trying to buy their homes. And the employees who are charged with selling the homes have more work than they can handle, so they are not always pleased to have additional work on their plate.

But the bottom line is, if you can get them to act on your behalf, you will get a good deal.

Best of luck with your purchase.

Dane Hahn
Web Reference:  http://www.daneandsandra.com
0 votes
Ute Ferdig, Agent, Newcastle, CA
Fri Aug 22, 2008
Hello Alyssa. Your first mistake is that you are applying common sense. I am being sarcastic, but my statement is based on past experience with short sales and REOs. The banks don't operate on the same wave lengths as most people do and many times they don't do what seems to make the most sense, which is one of the reasons why dealing with them is so frustrating. You just don't know what to expect. One thing you have to remember is that you are not dealing with different decision makers depending on whether you are working in a short sale or foreclosure scenario and that's why it is very possible that the bank will look at your offer differently once they own the house. I have seen failed short sales where the property came on the market with an asking price that was below the price that was offered in the short sale. Just this week I spoke to a friend who's a mortgage broker and she told that one of her clients who was trying to buy a house as a short sale for $280,000 was later able to buy the same house for $225,000 as an REO. I don't want to get your hopes up that you'll get this house for less once it's a foreclosure. My example is just intended to show how different things can work out depending on whether you are dealing with the short sale department at the bank or the bank's asset manager. Good luck to you.
0 votes
Scott Godzyk, Agent, Manchester, NH
Fri Aug 22, 2008
Good Morning Alyssa,

A short sale could take 3-6 months. The banks has to first approve the finacials of the seller to see if they qualify for a short sale, often this part is skipped and an agent will try to submit everything at once, this is what takes the time. Once a person is accepted to do a short sale, there is still no guarantee as the numbers have to work for the bank and the seller. The bank will setermine if the seller has the finances to pay back the balance between what the owe and what it is selling for. If so the bank will ask them to sign a note fore the balance. If not the bank will give them a 1099 for whioch the seller will have to pay taxes on this forgiven amount. Then when you get to the actual sales price, the listing agent has to submit a net sheet that shows all the expenses to be paid at closing like back taxes, water bill, sewer bill, hoa fees, commission and such. The bank then has to determine if they are better off taking the short sale or recouping their money in foreclosure, if there is private mortgage insurance then the bank doesnt haveto take a loss as the PMI will pay the balance or take the house. So the bank has no incentive to rush and get these things done. Inmost cases they can make more money or lose less money i should say by foreclosing. It sometimes takes a couple of months from the time they foreclose to the time you see that house come on the market though. Goo dluck with your purchase.
Web Reference:  http://www.ScottSellsNH.com
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