The absurdity of short sale negotiations...

By
Real Estate Agent with Keller Williams Realty Coeur d'Alene AB37665

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!

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Janna Rankin Scharf provides a superior level of real estate service to home buyers and sellers in Coeur d'Alene and Kootenai County, Idaho. Visit www.JannaScharf.com for area information and to search for all homes in the Coeur d'Alene Multiple Listing Service. 

No matter how grand or modest your real estate dreams may be, you can turn to me in confidence.  Give me a call today so I can  be of service to you!

Janna Rankin Scharf AB, GRI, CLHMS, PMN, SFR  208.651.9700

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Re-Blogged 2 times:

Re-Blogged By Re-Blogged At
  1. Esko Kiuru 05/12/2010 11:51 AM
  2. Shanna Hall 05/26/2010 11:31 AM
Topic:
Home Selling
Groups:
Keller Williams 'Rainers
Short Sales and Forclosures ONLY
Short Sale REALTORS®
"Whacked"!!!
Club Chaos
Tags:
short sale negotiations

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Rainer
208,634
Kymberly Caldwell-Muniz
(909) 973-0410 - Fontana, CA
TCR Group Keller Williams Realty Rancho Cucamonga

I am working on one from Chase they are actually working with me. The first and second mortgage is with them. I had a Band of America and it was absolutely crazy on trying to get that one closed. It makes out jobs harder working with the banks. I apologize that you are having to go thru this ordeal but it does happen when you go up the food chain.

May 11, 2010 07:04 AM #24
Rainer
5,690
Kurt Scharfe
Charles Rutenberg Realty - Lockport, IL

Hello. We share some of the same problems with short sales. Hey Janna even our last names are close! I had a buyer lowball a listing in January and still I put it thru. After working with
BOA for two months, I had to remit all the information they wanted on equator.com. I admit that the process started speeding up at this point.

It took about 10 weeks to get to a real negotiator on this account. The lawyers were calling me on conference in April. BOA came back with a counter 25K under the listing. Giving me five days to respond I went to the other realtor. She discussed it with their client 3 days later and did not counter again. The excuse was that it was too close to April 30 deadline. I explained that the contract was signed in January. However the buyer still balked. Makes you wonder how earnest they were.

It is not only the bank but some of our fellow realtors who need an education in short sales!

May 11, 2010 07:06 AM #25
Rainmaker
1,136,365
Bryant Tutas
Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL
Selling Florida one home at a time

Janna. This sounds about right!! All we can do is keep pushing. Give a couple of weeks at tgheir price and then start reducing again. The BPO is only good for 60-90 days so submit a new offer after that time frame and you will get another BPO done. Make sure you connect with that BPO agent and be sure they know the contrcat price and have the compos to justify it. All we can do is our best.

May 11, 2010 08:42 AM #26
Rainmaker
430,146
Shanna Hall
Real Estate Solutions - Kirkwood, MO
I love selling houses!!!St. Louis, MO 314-703-1311

My heart goes out to you!  I ahve been in that situation before...  If you want to send me an email- I will forward teh email I sent to them that made them change thier mind and accept teh offer we ahd in front of us...  shanna4stl@yahoo.com

May 11, 2010 08:48 AM #27
Rainmaker
45,043
Mark McHugh
Clearmark Real Estate llc - Warwick, RI
Realtor Rhode Island 401-641-3842

Janna, I hear you. With all the changes the government is trying to make with regards to short sales, it still comes down to a banks uninformed decisions. There's always more business out there. Go get it.

May 11, 2010 08:53 AM #28
Rainmaker
233,199
Elliott S. Topkins
Topkins & Bevans-etopkins@topbev.com - Boston, MA
Massachusetts Real Estate and Title Atty

What you went through is typical of what I have been seeing. Read The Big Short, and you will see where this all comes from.

May 11, 2010 09:08 AM #29
Ambassador
1,126,567
Joe Pryor
The Virtual Real Estate Team - Oklahoma City, OK
REALTOR® - Oklahoma Investment Properties

1st Horizon is no picnic. I have two investor properties we represent right now. What gets me is when you go through multiple buyers because of the wait which often means no payments for 20 months, and all the opportunity for investment by the bank lost. But what the hell, we will always bail them out with our tax dollars, why should they be efficient.

May 11, 2010 09:11 AM #30
Rainer
149,989
Ed Macias
Real Estate Teammates - Miami, FL
Miami FL-REO Property Management Multifamily

The trick is to keep submiting and not give up. many times once they deny an offer you can submit another one and get a different negotiator that will be more cooperative.

May 11, 2010 01:01 PM #31
Rainmaker
1,099,361
Jane Peters
Home Jane Realty - Los Angeles, CA
Connecting you to the L.A. real estate market

Absurd is mild.  Take comfort in the fact that your Seller did everything in good faith to help the bank avoid another foreclosure, but will end up not really worse off and without the aggravation of going through a sale.  If I understood a recent post, the hit on his credit will not be much or any worse than the short sale.  It is a shame you put so much work into it to be dismissed in this way. 

May 11, 2010 04:41 PM #32
Rainer
126,018
Barbara Kornegay
REMAX Essential - Wilmington, NC
Wilmington NC Real Estate, Homes

Uhhhh They are a pain in the you know what.... This is why we have attorney handle all of our short sale negotiations and the also negotiate their fee with the bank!!!!

May 11, 2010 10:52 PM #33
Rainmaker
1,842,069
Elizabeth Weintraub Sacramento Real Estate Agent, Top 1% of Lyon Agents
Lyon Real Estate - Sacramento, CA
Put 40 years of experience to work for you

Hey, you swiped my word. LOL. My last 2 short sales with First Horizon did not go well. I managed to close one but yesterday also canceled a First Horizon short sale because the bank insisted that the seller contribute. The sellers lost 40% of their income and were forced to move out of town after taking a second pay cut. They could not afford to contribute. Was it price? No. First Horizon would accept the price, but it would not accept the contribution from the buyer -- only from the seller.

May 12, 2010 02:14 AM #34
Rainer
263,671
Bill Travis
Captain Bill Realty, LLC - Gilbert, AZ
Broker/Owner

Short sales can be a royal pain, and take too much of our time. That's why I think finding a good professional negotiator company can work well.

May 12, 2010 02:23 AM #35
Rainer
5,343
Cheryl Pratt
Century 21 Town Creek Properties - Johnson City, TX

I can understand your frustration. Keep pushing forward... there has to be a better route for this type of negotiations of short sales.

May 12, 2010 04:43 AM #36
Rainmaker
2,153,834
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

Janna...I love this business...who has time for TV? Just do a short sale and you get it all is what I say.....thank you

May 12, 2010 08:28 AM #37
Rainmaker
543,631
Eric Michael
Remerica Integrity, Realtors®, Northville, MI - Livonia, MI
Metro Detroit Real Estate Professional 734.564.1519

Brutal story. That's terrible for you and your clients. Hope this isn't the normal process from here on out!

May 12, 2010 08:29 AM #38
Rainmaker
1,203,018
Tony & Darcy Cannon
Keller Williams Legacy - Woods Cross, UT
The C Team

Janna, that is brutal.  My new favorite thing is waiting for 4 to 6 months for the 3rd party (bank) to approve the short sale price, only to have them approve it with a 48 hour window to close the deal.  Are they serious?  They took months and are giving buyers 2 days?  I could see a week, but 48 hours and even less is a little ridiculous!

May 12, 2010 08:45 AM #39
Rainmaker
325,572
Esko Kiuru
Bethesda, MD

Janna,

It sure is a jungle out there in short sale land. Mortgage lenders are getting a bit more flexible nowadays in working things out in a reasonable time frame. That's what Vegas pros are telling.

May 12, 2010 11:31 AM #40
Ambassador
1,995,844
Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 714-319-9751 DRE01267479 - Costa M

I'm with Broker Bryant, you should be able to get a new BPO in the next few months, and hopefully that will help.

May 12, 2010 05:39 PM #41
Rainer
123,310
Mike Linkenauger
Jacksonville, FL
Short Sale Specialist Network

Its definitely crazy out there.  In addition to working with thousands of sellers monthly around the country, I also keep an inventory of around 75-100 short sale listings in my area at any time.  Negotiations and the process in general right now are just crazy.  There are only a handful of lenders that have their stuff together right now.

 

May 13, 2010 02:35 AM #42
Rainmaker
354,171
Damon Gettier
Damon Gettier & Associates, REALTORS- Roanoke Va Short Sale Expert - Roanoke, VA
Broker/Owner ABRM, GRI, CDPE

Janna, I feel for you.  I have had similar experiences with other lenders.  Eventually they will get the memo that we just want to sell the inventory.

May 13, 2010 05:47 AM #43
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