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Short sale to foreclosure...could it have been avoided?

By Pacita Dimacali

Real Estate Agent with Alain Pinel BRE 01367196

October 21, 2011 07:53 PM

This short sale is going to foreclose

It’s been 5 months…..several showings, a price reduction, but not a single offer

What went wrong?

It WAS a cute house when it was first listed. It was practically staged. And it DID generate a few showings. The price WAS competitive (although the sellers balked at the lower price the realtor suggested).

And then….

The seller moved out of town.

· Left uncollected trash in front of the house.

· Neighbors followed suit and added their own garbage until they created their own mini-Mount Trashmore

· Agent alerted seller to have trash cleaned out, and have a friend keep an eye on the property to make sure it stays presentable

· Weeds and grass kept growing. Paper and empty cans and beer bottles appear from time to time in the front yar.

· Realtor alerts seller that the house is looking worse than other foreclosed properties, but nothing was done.

Notice of Trustee Sale: a huge turn off.

Finally, a Notice of trustee sale is posted on the front door. Agents and their buyers who came by decided to pass.

Calls to the CHASE bank to postpone the trustee sale were futile….unless there’s an offer on the table, there’s nothing they can --- or will -- do.

This short sale property will be foreclosed. Sadly, this was not only a tall order, it’s a lost case. In California, 3 out of 5 short sales succeed. This is not one of them.

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Barbara Tattersall

Keller Williams Realty Metropolitan (Keene,NH) - Keene, NH

GRI

Hi Pacita,

I had a similar situation with a house that was not cared for, sellers' rejected an offer because it would not cover their expenses, and the bank would not communicate when the sellers wanted guidance on reducing the price. While we were trying to get answers, the lender was ordering an auction! Sellers removed whatever they could from the house and left town. I went to the auction and the bank bought it back for way more than they should have. It's probably worth half of that. It felt like we were trying to save a dying patient and lost the battle. So the house sits, overgrown lawn, debris in the yard, and generally a messy eyesore. Very frustrating.

Oct 21, 2011 11:30 PM

Charles Stallions Real Estate Services

Charles Stallions Real Estate Services Inc - Gulf Breeze, FL

Buyers Agent 800-309-3414 Pace and Gulf Breeze,Fl.

I think that has happened to everyone if you've been around long enough especially in the rental dept. But when a seller vacates doen't that stop the short sale.

Oct 22, 2011 12:42 AM

Bryant Tutas

Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL

Selling Florida one home at a time

Bummer. It happens to the best of us though. It makes it very difficult when the sellers are not participating.

Oct 22, 2011 02:25 AM

Chris Ann Cleland

Long and Foster Real Estate - Gainesville, VA

Associate Broker, Bristow, VA

Short Sales need to be in show ready condition too to sell. I think that's something hard for someone who is in financial distress to begin with to grapple with.

Oct 22, 2011 03:10 AM

John McCormack, CRS

Albuquerque Homes Realty - Albuquerque, NM

Honesty, Integrity, Results, Experienced. HIRE Me!

Unfortunately sooner or later we all deal with this scenario. I agree with Bryant #3 it's even worse when the seller is not participating.

Oct 22, 2011 04:43 AM

Pacita Dimacali

Alain Pinel - Oakland, CA

Alameda/Contra Costa Counties CA

Barbara -- whenever I have a client who wants to vacate the short sale property, I counsel them on making sure the house is presentable, and that they check on it from time to time. Unfortunately, not all of them listen.

Joyce --- no, when a seller vacates, that does NOT stop the short sale. But it makes it extremely difficult if the seller doesn't take care of the property

Bryant --- the seller must want to the short sale to succeed even more so that we realtors do.

Chris --- yes, distressed homeowners are already psychologically and emotionally distraught, but they woul be in worse shape if the short sale does not succeed.

John --- it's discouraging to have to put in so much work but the seller disregards the realtor's advice anyway.

Oct 22, 2011 05:33 AM

John M. Scott

BRE # 01442690, Scott Keys Properties - San Francisco, CA

Broker / Owner San Francisco Bay Area

It's the same with any sale when the home is vacant. Lack of upkeep and maintenance will eventually show. In an REO it's usually the REO manager or agent who take on this responsibility. It's such a shame when a short sale seller doesn't see how important this is.

Oct 22, 2011 07:02 AM

Doug Bullwinkel

E Mortgage Capital, Inc. NMLS 1416824 - Roseville, CA

Mortgage Loan Officer NMLS #281609

Now this seller will have more to deal with on their credit and it could have been avoided. Another sad story in the naked city.

Oct 22, 2011 07:50 AM

Kathleen Daniels, Probate & Trust Specialist

KD Realty - 408.972.1822 - San Jose, CA

Probate Real Estate Services

Pacita, Sellers need to understand they do play a role in a successful short sale. Clearly the sellers had given up and did not care or they were simply unrealistic. Sellers balking at a lower price … seriously? My goodness … they just did not want to get it and will likely later regret their choices.

Oct 22, 2011 05:15 PM

Kasey & John Boles

Jon Gosche Real Estate, LLC - BoiseMeridianRealEstate.com - Boise, ID

Boise & Meridian, ID Ada/Canyon/Gem/Boise Counties

What shocks me is that your statistic is that 3 out of 5 short sales in California succeed. That is fascinating. I wonder if it is because of the non-recourse laws, so the banks figure they may as well get it off the books right now? Idaho doesn't have nearly that good of statistics (though my husband does, he's awesome :-) -Kasey

Oct 22, 2011 05:42 PM

Oh, and by "my husband does" I didn't mean 3 out of 5, I meant more like 9.5 out of 10, just to be clear :-)

Oct 22, 2011 05:43 PM

Not a real person

San Diego, CA

Monday is my Happiness Day.
I visit as many blog posts as I can during the day
and spread happiness, which means I probably didn’t read this post.
I just stopped by to spread some happiness.
Feel free to delete this comment if it doesn’t make you happy.

Happy Monday!

Oct 24, 2011 02:49 AM

John--- it takes heart for a short sale seller to maintain a stiff upper lip and do what it takes to keep the property presentable.

Doug --- if only the seller would understand and appreciate why exerting a little more effor today will save them from bigger challenges tomorrow.

Kathleen --- maybe the more we talk about what it will take to do ashore sale, the more people will understand

Kasey-- we hope to improve the stats

Russel--- always nice to get a comment from you

Oct 24, 2011 07:59 AM

Short sale to foreclosure...could it have been avoided?

This short sale property will be foreclosed. Sadly, this was not only a tall order, it’s a lost case. In California, 3 out of 5 short sales succeed. This is not one of them.

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