Janna Rankin Scharf, GRI, CLHMS, SFR - Coeur d'Alene Idaho Homes For Sale
Short Sale and Foreclosure Resource Specialist
The absurdity of short sale negotiations...
One thing is for certain, my job is never boring. I have been working with a seller client for nearly a year in an attempt to sell an investment property. It is worth much less than he paid for it a few years ago and he is upside down on his mortgage. Because it is an investment property, he doesn't qualify for a loan modification. He can't lease it for enough to cover his payments. He can't afford to cover the payments. He's stuck.
We started out last June listing the home at $169,000. As time went by with practically no activity, we lowered the price incrementally, and finally to $155,000 the day before Thanksgiving, at which point we got an offer of $145,000. Along the way we picked up one other contingent offer of $125,000.
As I sat about submitting the short sale packet to First Horizons last January 2, it took me until the end of February to successfully get the offer acknowledged by them! Although everything was submitted complete on January 2nd via their fax as requested, I would find that they were missing this, then missing that, and so on, although everything was submitted together, complete. I would try to submit the requested missing documents only to be unable to have their fax accept a fax although I would try 24/7. So I mailed the docs in. Then it takes 2 weeks, they said from the time they receive them, to have them in the system before I can even check to see if they got them!
Towards the end of April we finally receive a counter of $158,000. The buyer couldn't come up to that price and withdrew. The home had been listed at $155,000 for five months, with only 5 showings for the better part of a year. I had a "conversation" via fax, my only means of contact with the "negotiator" which included the showings history and listing price history printout from the MLS. Actually, I would send a fax, then call in to customer service 48 hours later and whoever answers the phone looks into the file to see if there are any messages for me from the negotiator. That's how we communicate. Ridiculous.
In their $158,000 counter, they were willing to pay $5000 towards the buyers closing costs and $1000 more to the 2nd than the payoff I had already negotiated. I asked them for authorization to subtract that extra $6000 they were willing to pay from the list price and market the home with an "approved" price of $152,000.
Nothing doing! They will not take less than $158,000 for the home! I sent another fax outlining again that the home had been listed since Thanksgiving at $155,000 with almost no activity. I said that the BPO was bad and offered comps to prove it, and asked that they order another BPO.
They said the BPO stands and that since the agent is uncooperative, they are closing the file.
Say what??? This uncooperative agent has been looking after their vacant asset for nearly a year, working in good faith to find a buyer for them. I have jumped through their absurd hoops, provided them with good comps and expert advice. Only to be told I am uncooperative!
My heart goes out to my seller who has done everything he can to make the best of a bad situation. As we approach a year that the home has sat vacant, I have raised the price to $158,000. The seller wants to keep trying.
It looks as though once again a lender will eventually take the home through foreclosure, and then sell it for much less than they could have received if they would have taken the expert advice I provided to them. It is absolutely absurd!
P.S. It is only fair that I mention that I have had very good experiences with short sale negotiations with other lenders lately, including Wells Fargo, Aurora and Chase. I actually think MOST lenders are making a real effort to improve what has been a CRAZY MAKING short sale negotiation process!