The banks seem to be looking for full mkt prices for short sales, which doesn't make sense. Considering their high volume, why not let deals go thru?

Asked by Andre Dyer, Plainview, NY Sun Feb 10, 2013

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7
Javier Menes…, Mortgage Broker Or Lender, Melville, NY
Wed Feb 20, 2013
Unfortunetly, some buyers think short sales = 35% off! This is not true. Short sales will, should and do sale for close to market value. Lenders have their own systems in place. They carefully analyze what these properties are worth today, they look at what their loans add to and then consider the offer on the table. If all the comps are closing for say $300,000, why in the world would anyone expect for the banks to accept $250,000? Obviously if the propertie's condition warrants a lower value, then adjustments are made. But if all things are equal, banks should be viewed no different than a typical seller.

Javier Meneses
Senior Loan Officer
NMLS #23130
Sterling National Bank
310 Crossways Park Drive
Woodbury, NY 11797
(516) 606-9648
3 votes
Debra (Debbi…, Agent, Livingston, NJ
Sun Feb 10, 2013
in fairness, uness the house has totally been trashed, why should the bank accept less than market value, considering they're already taking (in most cases) a huge loss?

I think that many consumers see the term "short sale" and immediately think they are getting the deal of the century.
Certainly, it is possible to buy a short sale and get a good deal, but a number of short sales are selling at, or close to, market price.

From my experience, the bank wants to see that you at least tried to get market value, so listing a home and starting off with a slashed price may not work out in the long run when the bank comes back with their response to that low offer.

The one thing I have discovered is that there is no way to predict what a bank may do...a lot of it doesn't make sense, to me, anyway.
2 votes
Ron Thomas, Agent, Fresno, CA
Sun Feb 10, 2013
If the VALUE of your asset was going up, on a daily basis, how eager would you be to DISCOUNT it?
2 votes
Tim Moore, Agent, Kitty Hawk, NC
Sun Feb 10, 2013
If waiting for a better buyer and a better offer works, then why should they stop doing it. Banks are not in the business to make friends or make people happy. They make money first and friends second, or maybe down near 10th or 12th.
1 vote
Annette Law…, Agent, Palm Harbor, FL
Tue Feb 19, 2013
Andre,
One significant problem we all face when engaging the short sale process is we can not see what is happening behind those 900 BILLION DOLLAR CURTAINS!
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The bank is running a parallel game. Completing a short sale is simply ONE outcome. Too big to fail should be translated, too big to care.
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Be aware, we carelessly say, 'the bank" when we all know 'the bank' sold the mortgage to an investor of some sort. The bank HAS already made their money, and lose NO money in the short sale. THE INVESTOR DOES. The parallel processes the bank is running are counter intentioned to the result the investor needs, and the bank (servicer) continues to MAKE MONEY! More money!
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What is happening behind those 900 BILLION DOLLAR CURTAINS makes a successful short sale nothing short of a miracle. Yes, some of you are MIRACLE WORKERS!
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When your buyer is considering a short sale, you need to look them in the eye and ask, "DO you believe in miracles?" If they say yes, make them understand, "Miracles are not discounted and take an eternity."

Best of success to you,
Annette Lawrence, Broker/Associate
Remax Realtec Group
727.420.4041
http://RealEstateMadeEZ.us
0 votes
Trevor Curran, Mortgage Broker Or Lender, Great Neck, NY
Tue Feb 19, 2013
I have to agree with Debbie and Ron: the loan on the books and the home as collateral are valuable assets to the Lender. The Lender conducts due diligence so as to obtain the best price for the property---and today that price is at or very close to market value (I'd guess within a 10% tolerance).

That's the TRUE concept of a short sale: the Homeowner claims she can't sell the home for what she owes on the property; the VALUE in current terms is less than the balance of her mortgage loan.

As Debbie so rightly points out, too many Buyers misperceive the "short sale" concept as being one where the Buyer swoops in and buys a home at substantially discounted prices. It's totally wrong. The Seller is asking for permission from her Lender to sell at MARKET PRICE. The Buyer doesn't get to request the Seller's Lender surrenders the home for a massive discount off MARKET PRICE.

In general I discourage ALL my Prequalified Buyers from buying a short sale property. It's a good deal for the HOMEOWNER ONLY, not for a Buyer who must wait an agonizing period of time only to buy a home at market price.

Trevor Curran
NMLS #40140
Mobile: 516-582-9181
Office: 516-829-2900
Fax: 516-829-2944
PowerHouse Solutions, Inc.
185 Great Neck Rd, Suite 240
Great Neck NY 11021
Licensed Mortgage Banker – NYS Dept. of Financial Services
NMLS#3528

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0 votes
Andre Dyer, Agent, Plainview, NY
Mon Feb 11, 2013
Buyers ask me this questions all the time? "Why is this short sale so high?"

If the short sale house only needs cosmetic work, then yes I absolutely agree that the bank can ask for mkt value & should not be in a rush to discount it. However, the houses I had in mind (sorry for not clarifying), were houses that needs a LOT of work or full renovation, but are priced similar to a regular sale house with minimal work. I see it very often.

My point is for us agents who do short sales, our volume of closings would significantly increase if the bank was a little bit more flexible, especially considering their volume load. More revenue for us, & at same time less headaches for them by decreasing their volume.

For my short sale deals, only a cash investor or a willing & visual buyer coming to the table with a 203k loan would be willing to take on some of these houses and close the deal. Even these buyers walk sometimes, bc their realistic offers were rejected & they simply have me find another deal.

Another issue I often come across is the bank sends out of town appraisors that have no idea about the area except what they see on their computer screens. Thus giving the banks an unrealistic mkt price.

It was reported that 2012 was the best year for ROI for real estate in six years. I believe 2013 will be just as great if not better, and short sales will be a big part of that, even with increasing prices.
0 votes
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