As we all know by now, Short Sales are a way of doing business in the market these days.  We also know that this can be a long and painful experience for both the buyer and the Realtor alike.  At the same time it can be a relatively smooth transaction as well depending on the bank and the loss manager you are dealing with.

In January I opened escrow on a home for a buyer on a short sale that showed all the signs of being a relatively painless short sale.  I could not have been more mistaken.

Prior to writing the offer I ran comps on the home and found that the home was reasonably priced considering the condition, location and market.  The listing agent concurred and we started to move forward in the process with hopes of a smooth transaction.

After waiting the usual 60 days to hear back from the bank, the response we received floored both the listing agent, myself and both our clients.  What we got was a counter offer for $160,000 more than we were in escrow at.

The bank stated taht due to the BPO that was done on the subject property that they felt that it was in fact worth the price that they were asking.

Confused by this the listing agent and myself re-ran the comps on the home and came to the same conclusion.  Armed with this information we proceeded to forward our comps as well as copies of the Home Inspection, Termite Report & Septic inspection back to the bank with a letter outlining the cost of the amount of work that needed to be performed on the home.

One week later we received a call from the bank informing us that they wanted to send their own contractor out to the home to assess and report on the condition.  i gladly met the contractor their and went over the issues and concerns regarding the home.  After his evaluation of the home he concurred with our estimates and reported to the bank that we were in line with both the price and condition of the home.

We figured that that would be the end of that and expected that the bank would decide to go with our offer and finish the transaction.  We were wrong.

I received an e-mail from the listing agents office yesterday that after they received the report form the contractor they decided to send out specialists in each area to do a separate evaluation of the home.  So now on Friday I have to meet the General contractor, termite contractor, electrical contractor, foundation specialist and septic company so that they can all re-asses the condition of the home and submit individual estimates on it.

How much confirmation do the banks want these days, how far are they willing to drag out the process, how realistic are they being in trying to move these homes that people want and need to move out of?

To me this borders on the verge of ridiculous.  We have submitted everything they needed and more to validate our position.

The big issue is that we still do not know if we will get the home.  My buyers are willing to take it  As-Is and deal with the work that needs to be done.  Are the banks really that willing to let a solid buyer walk away by dragging them through this type of red tape?