Distressed Property Owner - I Just Spoke With Your Listing Agent

No, Distressed Property Owner, I'm not trying to steal a listing, but I just spoke with Your Listing Agent.  You see, I represent a Buyer who is under contract on a short sale; the deadline to obtain Short Sale Consent from Seller's lender is looming and it isn't looking good.  Buyer wants to look at other properties but isn't really interested in other short sales where the same bank holds the mortgage.  Normally, I would insert my rant about that bank here, but this is a different subject.

Here's what happened:  My Buyer found 4 properties to look at - one of them was your house.  None of them have MLS notes as to short sales, but a quick look reveals that 3 of them were purchased by the current owner at or above the listed price - I send a quick email to each listing agent - "is 123 Any Street a short sale?"

Your agent emailed back, "Not officially but getting close since they are now in foreclosure.  Not sure what is owed...."

What?  So I pick up the phone and call your agent.  What I hear just boggles my mind.

After exchanging pleasantries, the conversation goes something like this: 

ME:  So, what do you mean, they are now in foreclosure?

I think they were just served - - very early in the process.

ME:  Who is the lender? 

I don't know, I think it might be Wells Fargo.

ME:  So, you don't know what they owe but you are you saying at the current list price, they could pay off their mortgage?

I think so; I don't know the balance, but I think they would be able to pay off and get out clean, including the missed payments and late charges, at the list price.   There have been no offers and now since they are going to foreclosure, this file is at the bottom of my pile. 

After a pause, because I was left speechless by that last part . . .

ME:  Why aren't you dropping the price to get an offer and do a short sale?

That's all I've done is drop the price - - look at it!   Again, I think my mouth just hung open.

ME:  If you did get an offer on this house that would force a short sale, who would negotiate the short sale?

There's no money to pay anyone, I guess I would. 

Wow . . . I said I'd call back if my folks still wanted to see the house, but the agent must have realized the lack of info wasn't going to help sell the house so, I got a call back from the agent who had quickly checked facts with the seller:  The lender is Bank of America and the seller has not been served, but an attorney has been sending them collection letters.  The listing agent encouraged me to show the house.

Distressed Property Owner, the reason I am writing this is because I just spoke with Your Listing Agent and I feel terrible for you.  I cannot call you because you are currently listed, but you need help.  You are in financial distress.  Your house is overpriced; I know this because if it were priced to sell, you would have received an offer.  I have previously shown your house so I know what it looks like.  Yes, you have taken price reductions over the 9 ½ months it's been listed, but there is no rhyme of reason to them.  It started well, but then fell off the tracks - - there has been no price change for the past 5 months!  Even though you are missing mortgage payments, you are not trying to achieve a short sale; you are clinging to the hope of selling at a price that will pay off your mortgage in full, even as you head down the path to losing your home.  I hope that does not happen.

Your lender will probably only consider a short sale if you enter into a purchase and sale agreement with a buyer and submit it to them for approval.  You need an offer to start the process and the only way to get one is to systematically lower the price until the property becomes an attractive investment for someone who is in the market.   

Unfortunately, I just spoke with Your Listing Agent and my buyer is no longer interested in looking at your house.  Remember, they understand the short sale process and they see it this way:  If they like your house, their offer would need to be near full list price (it probably won't appraise at that), or they will be at the mercy of your agent (and your file is at the bottom of the pile) to negotiate a short sale with a large national lender.   They choose to avoid what looks like another losing proposition to them.

Never having spoken with you, I don't know, maybe you are well-informed and have been given information about all of your options and this is what you've directed your agent to do.  But, Distressed Property Owner - I just spoke with Your Listing Agent and my Buyer, who needs a house right now, is not interested in seeing yours, and I feel terrible for you.

TERRY DRISCOLL, REALTOR - MID COAST MAINE RESIDENTIAL REAL ESTATE

Cell:  207/449-9696     :    Toll Free:  1-877/277-1010

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ALLEN & SELIG REALTY   .   15 VINE STREET    .   BATH, ME   .   207/443-2200