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How can the market value of a home in Florida go up $30,000 dollars in 5 weeks?

By Neal Bloom

Real Estate Agent with Brokered by eXp Realty LLC SL # 3014652

May 16, 2009 05:33 AM

How can the market value of a home go up $30,000 dollars in 5 weeks?

And after I thought I've seen it all...then this.

Well I'll tell you how it happened. I've had this listing for about 9 months now. It's a short sale and I've had 2 contracts on it but every-time we get down to the end....the buyers can't close because their lender declined the loan. This is a very annoying thing to have to go through. Way back when I was approached by the home owners to take this listing...I was very reluctant to do so.

It's unlike me to put an appointment off but I did it based on the information I was given by them over the phone with my initial consultation. They were now living 3.5 hours away from the subject property and wanted to meet with me there to have me list it and sell it short. At the time.....I had a handful of listings that were short sales and wasn't too sure this one would fly based on what they were telling me over the phone. They were begging me to take the listing even after I told them how the process worked so... in the end....I decided to meet with them.

From what they told me over the phone...they were already 4 months behind in their payments. When I showed up at the house...it turned out that they were really 6 months behind. I explained to them that they would most likely be receiving a summary judgment from the court. Once I mentioned this to them .....they whipped it out and it said they had 20 days to respond. The trouble was that they had been holding it for 10 days. I told them that they needed to hire an attorney to go ask the judge for an extension. They claimed not to have any money and asked we what they could do. I told them to go down to the court house first thing Monday morning and ask the clerk how to fill out the extension and submit it and then to notify the attorney that was suing them. They did this and apparently they were granted more than the normal 60 days.

After the first deal fell through....the lender allowed us to get another contract within 30 days before they would have to kick it out of the short sale department. The good thing was we now had an approved price in writing. I explained to the agent with the next offer that this was the price the bank would take and not to waste time submitting anything else. They submitted the offer and the deal died once again due to false information. They claimed that the buyer was fully qualified and showed us proof of funds...then in the end....their loan was declined.

Once again I had an approved short sale in writing and no contract. The negotiator was nice enough to give us another 30 days to get in a contract. This time we had one within one week but it had to be submitted to the workout department and would take up to 4 weeks to be re-approved.

2 weeks went by and I received a call from the negotiator letting me know that the file was submitted but since the property had sat for a while they required a new BPO to be done and would contact me for access into the property. After a total of 5 weeks and endless calls asking the status of this deal...I received an email from the negotiator....they said that they got back the BPO and that the investor said that based on the properties current value.....they now wanted $30,000 more and that I should ask for a counter from the buyer and they needed an answer within 3 business days. I was like....WHAT?

Holy Crapola...Batman!

How can a property value go up $30K in 5 weeks? It's virtually impossible for this to happen in a market like this along with the fact that this property had damage and was not in move in condition.

I called the negotiator and asked how they were able to justify this especially when they never had anyone call me for access into the property. I questioned them on how they did their BPO without actually seeing the inside. I also informed them that the buyer submitted a loan qualification letter that stated that they were only approved up to their purchase price that they submitted and that if they knew the lender wanted more then they wouldn't have searched for a home in that price range......They wouldn't have ever qualified for the higher price.

Why would I represent one price and then have to ask the buyer for more? If I knew this then I would have raised the price and informed everyone from the beginning.

I asked them to give me the opportunity to submit my own com-parables along with photos of the inside to prove my case. The negotiator appreciated that but said they didn't need them at this time.

They said they would resubmit it to the investor and let me know. The next day they said that the only issue the investor had was that the first page of the contract showed the purchase price as illegible and could I resent them another copy. I was then expecting them to approve it at the original price agreed at.

The funny thing is that they never acknowledged how they came up with a price increase in the first place.

Hopefully they'll reconsider our position.

For more information please contact Neal The Real Deal Bloom-Realtor® /Keller Williams Properties

1625 N. Commerce Parkway,Suite 105

Weston FL 33326

(954)608-5556

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Anonymous

Terrylynn Fisher, Diablo Realty, Walnut Creek California

We've been witnessing this for quite some time, and were hoping it was getting more realistic out there...oh my ...thanks for the frustrating post and hope it works out for you and all of us.

Good one, Neal

May 16, 2009 03:56 PM

#31

Brian Lee Burke

Kenna Real Estate - Lone Tree, CO

Broker & Advising Expert-Kenna Luxury Real Estate

Neal - oh, that just makes me have flashbacks lol. We had one that died because the lender sent out a 2nd appraisal (not BPO this time, but an appraisal) which came back so high that the lender said they didn't need a short sale...errrr, not sure how that was possible to this day. All other comps, and there were plenty (condo) were about 10K lower than the supposed appraisal. Go figure. ~Rita

May 16, 2009 04:02 PM

Mark MacKenzie

Phoenix, AZ

Hmm, I'm not sure what to think about this other than that markets are very volatile right now and especially in Florida. You can ask the same question about a lot of stocks too. :)

May 16, 2009 04:02 PM

Chris Olsen

Olsen Ziegler Realty - Cleveland, OH

Broker Owner Cleveland Ohio Real Estate

Hi Neal -- I ran into something similar once, completely confounding. Let's think: Let's let banks take over residential real estate and completely drive the entire industry into the ground! <not!>

May 16, 2009 04:02 PM

Sharon Alters

Coldwell Banker Vanguard Realty - 904-673-2308 - Fleming Island, FL

Realtor - Homes for Sale Fleming Island FL

Neal, we had a waterfront (canal to river) house and the bank used an automatid valuation and mixed homes OFF the water with this house and came up with a very low price. Another BPO came in with comps from five miles away in a golf/club community while ignoring sales in the subject neighborhood which had no amenities! Who knows what goes on in the minds of people who do BPOs!

And a PS to Bryant's comment - one reason there is no 'approved short sale' is that, believe it or not, there is the possibility that the loan can be sold AGAIN during the negotiations. The new investor has to approve, back to square one!

Sharon

May 16, 2009 04:28 PM

Jorge Muralles Muralles

Muralles Real Estate - Newport, RI

Real Estate Market, Newport RI

Goos story, the thing is that a BPO is not an appraisal.

As you know it is done by real estate agents, one agent could come up with a different value.

I am sure that this BPO were done by different agetns, that could be the reason.

May 17, 2009 12:45 AM

Neal Bloom

Brokered by eXp Realty LLC - Weston, FL

Realtor CRS-Weston FL Real Estate

Joe,

I would think they know their liabilities but they should be careful what they say....it could come back and bite them in the butt.

Mike,

So far I haven't seen the cooperation level change like they say it will.

B and S.

As much as I want to get upset about it...it was more a surprise than anything so I'm used to it now...I'm just trying to stay away from ones after I look at the picture first to see if it's even worth it...I've turned down a few because there were too many obstacles to overcome up front.

Kim,

That's the bad part of doing short sales...you might not get paid for all the hours you put into it...but we know the score going in.

Christine,

I did...they would take them at this time. I also offered to go into the property and take pictures of the actual damage and send them to them...they said they didn't require it for now.

Susan,

Nope ...never a dull day in my RE life.

B and C,

It could also be because there were different negotiators or if the investor sold the loan it could be a problem but they never told me if they did.

Esko,

I'm sure you're seeing this over in Vegas as they are pretty high up on the list to the same status that we have going on here.

Roland,

:))

Terry Lynn,

I'm sure it's not just happening in FL...after all the banks is located in another state.

Rita,

I figured that they both wouldn't be the same but then I would have to renegotiate with the lender if that's the case.

Mark,

Who knows what the buyers appraisal would come in at let a lone the bank BPO.

Chris,

They think they know it all but I doubt it...no one is perfect...that's for sure.

Sharon,

Then they shouldn't give you the approval in writing....at least state that it's only good for that one deal and not tell us to get another contract for the same value and then change it...makes no sense if you can only qualify for a certain number.

Jorge,

It had to be done by more than one as there was another one done earlier on when we had the other two approvals from the lender in writing. And they probably wouldn't send an appraiser out because they would have to charge $300 when they can get a Realtor to do it for like $50...you get what you pay for.

May 17, 2009 01:26 AM

Gary L. Waters Broker Associate, Bucci Realty

Bucci Realty, Inc. - Melbourne, FL

Eighteen Years Experience in Brevard County

Banks are squirrels. Besides, they don't give a rat's behind about the consumer. As for BPOs I am not sure what happened there. When I do one it is spot on...Good luck.

May 17, 2009 02:29 AM

Norma Brandsberg

Marks Realty Co. Inc., Lynchburg, VA, 540-586-9496 - Forest, VA

Wow, they must really desperate! How stupid can they get. No wonder there is a huge number of listings in inventory.

May 17, 2009 02:33 AM

Fernando Herboso - Associate Broker MD, & VA

Maxus Realty Group of Samson Properties - Clarksburg, MD

301-246-0001 Serving Maryland, DC and Northern VA

The core of the problem is that the banks and Realtors are operating in a different field. .

May 17, 2009 02:50 AM

Ann Allen Hoover

RE/MAX Advantage South - Hoover, AL

CDPE SRES ASP e-PRO Realtor - Homes for Sale - AL

Neal, that is certainly a crazy one......beats everything thing else I've heard this week.

I hope things will work out for you and your clients.

May 17, 2009 03:23 AM

Patricia Aulson

BERKSHIRE HATHAWAY HOME SERVICES Verani Realty NH Real Estate - Exeter, NH

Realtor - Portsmouth NH Homes-Hampton NH Homes

Things sure are crazy these day, Hope things work out.

Patricia Aulson/Portsmouth NH Real Estate

May 17, 2009 06:20 AM

John Elwell

CENTURY 21 Bill Nye Realty, Inc. - Zephyrhills, FL

You Deserve a Full-Time Agent, Not Reduced Results

What changed wss not the home's value. It was the appraisal that changed. Either the first was too low or the second was too high. Or some combination of the two. After all, they are simply opinions of value and we have all seen them differ greatly on the same property.

It is funny how when a deal heads south, whether short sale, foreclosure or traditional sale, it is often a bank or lender that is causing the problem.

Personally I do not do short sales based on the problems they create. This is just another example. You have my sympathy for having to work through all of this with no guarantee that you, or a cooperating agent will make a cent for all of your efforts. Best of luck.

May 17, 2009 07:13 AM

Scott Miller

Best Connections Realty - Boca Raton, FL

ifoundyourhome.com

Precisely the reason I don't do short sales. No interest in the long, drawn out fight to the finish....I would never waste an honest to goodness buyer on this B.S. circus.

You can check out what I wrote in my blog about short sales.

GOOD LUCK!

Scott Miller, Realty Associates, Boca Raton, FL

May 17, 2009 12:34 PM

Kathy Streib

Cypress, TX

Home Stager/Redesign

Neal, I'm not a Realtor but learned of short sales in '07 when we moved back to Fl and decided to rent and keep our eyes open for something. We were in our rental 10 months before one of the shorts we initially looked at even came near closing. You have certainly gone above and beyond to help these sellers!

May 17, 2009 12:52 PM

John Novak

Keller Williams Realty The Marketplace - Las Vegas, NV

Henderson, Las Vegas and Summerlin Real Estate

It's pretty amazing how distorted some of the valuations have gotten in this market. You look good in KW red, Neal!

May 17, 2009 03:47 PM

Allison Stewart

St.Cloud Homes - Saint Cloud, FL

St. Cloud Fl Realtor, Osceola County Real Estate 407-616-9904

Hi Neal

And you wonder why buyers are leary? An Opinion is just that. There is little value of BPO if it does not factor in condition. Appraisers have to defend their findings- pulling stats is just not enough.

I do hope this works out for you- raising the price is just not right.

May 17, 2009 08:47 PM

Kathy Clulow

Uxbridge, ON

Trusted For Experience - Respected For Results

Hi Neal -while $30,000 sounds like an unrealistic price increase, I suppose it depends on the price range the home is in.

Having said that I do not imagine you would be writing about it if it were in a high end price range.

May 18, 2009 02:53 AM

Lori Isaacson

Credit Restoration Consultants - Plantation, FL

And people want to know why Florida is called the "scam capital of the country"

This stinks!!

Happy Monday!!

Lori

May 18, 2009 03:12 AM

Neal Bloom

Brokered by eXp Realty LLC - Weston, FL

Realtor CRS-Weston FL Real Estate

Erica,

That's the MO..they end up repackaging them and selling for less later...wasted time and money.

Gary,

Obviously they don't or the would be doing more to make these deals close more often.

Norma,

Just another regular day in short sales I guess.

Fernando,

That's for sure....total lack of communication and education.

Ann,

Thanks for the encouragement.

Patricia,

Thanks

John,

The problem was it most likely was a BPO which is certainly not a certified appraisal. That's what happens when you pay $50 instead of $300 for a real one.

Scott,

That's the name of the waiting game and I'm aware of it but I really was floored with the result they gave me.

Kathy,

Thanks it's good you're not one....you need a good stomach for it sometimes.

John,

I'm sure you're seeing the same in Vegas.

Hey Allison,

Exactly...appraisers have to but do BPO's? It's totally an opinion of value...we do them all the time...it's just a fancy word when it's really just a CMA.....I'm sure whomever did it was not from the area.

Hi Kathy,

In fact I originally told the negotiator that I thought it would come in lower and she said then they would have to sell it lower if that was the fact so I had planned on talking about it regardless.

Lori,

I'm not sure what you can call it but it is bizarre.

May 18, 2009 09:28 AM