Real Estate Blog - Q&A From Destin Short Sale Buyer

Home : Blogs : Wendy Rulnick "Its Wendy!" Destin Short Sales : Destin Short Sales & Real Estate Blog

Q&A From Destin Short Sale Buyer

Wendy,

I have read quite a bit of your articles regarding Destin real estate and area short sales. I have made an offer to buy a short sale in October and we are still waiting. The house is brand new, it's listed for $799,000. The builder owes over $700,000. The house is not finished, it needs countertops, appliances, driveway, painting, finish hardwood floors, etc. Approximately $100,000 is necessary to complete house. A home 2 doors down just sold for $540,000. This new house is the nicest house in the development but definitely not worth $800,000. In our opinion even though it is the nicest house it probably is still not worth more than $600,000 to $650,000 that's if it was completed.

I originally offered $500,000 but now want to reduce my offer to $450,000 since it needs $100,000 to fix up and in our Destin real estate prices are still falling. The negotiator is assigned and they will do an appraisal or BPO within 30 days. I feel $450,000 is fair given the changing market. Do you know typically how much Countrywide will go below market value, especially on an unfinished house?

Thanks,

Joe

Hi Joe,

Countrywide will not "really" go much below market value. They will rely heavily on the Broker Price Opinion (BPO) or appraisal, as I wrote in 'Short Sale Pricing: The "X Factor"' and will want close to that figure. Their calculations will depend on who the end-investor is on the loan, and those specific requirements. For example, if the loan has mortgage insurance (MI), they might want the "Net Proceeds" to be 91% of appraised value sometimes! One thing you cannot control is the BPO or appraisal, but you can inform the party doing the appraisal of cost estimates to finish the house. That may help keep the end figure realistic.

If you reduce your offer now, Countrywide might close the file. That will depend on the negotiator. Sometimes Countrywide relies on a valuation they have in their system already, and if the offer is below it, they will just cancel the file. Then you will have to start all over, and again risk the file being cancelled because you are too low.

Your concerns make sense and are valid. If you think you are overpaying for a property, I'd use caution. Best of luck.

Wendy Rulnick

Broker, CRP, CRS, GRI, ABR

Rulnick Realty, Inc.

Toll Free 877-487-9639

Local 850-650-7883 ext 204

Search Destin FL real estate

Short Sale Pre Foreclosure Help.

Email itswendy@rulnickrealty.com

Wendy Rulnick specializes in real estate sales, short sales, traditional sales on Emerald Coast of Florida: Destin Florida real estate, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Dune Allen, Blue Mountain Beach, Freeport, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field. Wendy Rulnick, Broker and Realtor, has been selling real estate for 20 years. She has won numerous awards, including the coveted ADDY for advertising design. She is ranked in the top ½ percent of all Realtors on the Emerald Coast of Florida for listings sold and was featured in Kiplinger Personal Finance Magazine as a short sale specialist.

This site, Wendy Rulnick or Rulnick Realty, Inc. is not providing legal or tax advice. The information provided is for educational and informational purposes only. It is recommended that sellers considering a short sale should consult an independent legal and tax advisor for more information.

Subscribe in a reader

Subscribe to It's Wendy's Blog by Email

Posted by Wendy Rulnick "Its Wendy!" Destin Short Sales on 01/23/2009 05:21 PM

Comments (14)

Short Sales in the ActiveRain Channel

countrywide short sales, destin short sales, buying short sales, destin real estate, wendy rulnick

Originally posted at: Destin Short Sales- Emerald Coast Florida Real Estate: Q&A From Destin Short Sale Buyer

This post has been included in Florida Information Okaloosa County, FL Information Destin, FL Information
Post is included in group: Short Sale Support Group
Post is included in group: Short Sales Specialists
Post is included in group: Short Sale Specialists & Pre-Foreclosure Education
Post is included in group: Short Sales and Forclosures ONLY
Post is included in group: Short Sale REALTORS®

14 Comments on Q&A From Destin Short Sale Buyer

JAN

I have delt with a short sale for a client of mine who has had a CASH offer in for 7 months. No Contingencies, and a very decent offer for the market and neighborhood. We'll finally last week we finally heard back and no word all those months. It didn't close because someone removed all the appliances and no one wants to replace them or adjust the price!! This is a breech of contract. Long and short of it is after all that time it died. What a long wait full of frustration.

Patricia Aulson/ Portsmouth NH Real Estate

Did I forget to mention it was CW who poorly handled this .

Patricia Aulson/ Portsmouth NH Real Estate

Patricia - Unbelievable. Did the seller remove the appliances? The long bank delays are also ontributing to price declines. The more quickly they approve short sales, the more quickly the market will stabilize.

Wendy, I am dealing with a Countrywide short sales right now. The buyer offered more than the payoff on the first (Countrywide). The offer was rejected because it was too high. Has this happened to you?

Also, I just listed another home this evening. The buyers are using a company called walkaway.com. Have you heard of this company?

JAN

Totally true abuot the need to get the banks to speed up the process, because the delay time impacts the market no doubt.

Kay - I have never had that situation - offer too high and rejected. Perhaps their is an anti-fraud checklist CW uses and that might trigger the rejection. I have not heard of the company, I negotiate my own short sales to ensure the results :)

Janice - It is a downward spiral.

Wendy - The mantra is that "banks don't want to own dirt...when it gets right down to it, they will deal rather than risk adding more stressed real estate to their portfolio". I really haven't seen this.

I have seen no indication that banks are more willing to help customers in foreclosure distress now that "stimulus packages" have been distributed. I have no problem with banks following their, tradtionally, conservative business model...unless they are getting "stimulus money".

What do you think?

Kent - I have not seen any improvement in bank turnaround time. It is getting worse. Now Countrywide completely closes files if there is any problem. They will not substitute a lucky new offer - as I just had occur when a previous buyer couldn't go up enough. Average approval times are four months. I don't know if they really KNOW what they are doing. They are bumbling. I have had two of my customers get interest rate payment help, one from Chase, one from Litton Loan. That's out of hundreds of people. This morning I was thinking our business is being overregulated through the "back door" - by way of the short sale lenders, and they are bringing down prices more. Their stimulous money- OUR money- may be swaying them to DENY more short sales.

No kidding! We are in for a rocky ride in 2009.

JAN

We had a short sale listing which also happens to be a fixer. The BPO estimated it at $500K, but the drive-by agent did not enter the property and did not have any idea of the condition of the property. We sent the loss mitigator copies of the contractor estimates to challenge the BPO.

A second BPO was performed, and this time, it was estimated at $300K. BIG DIFFERENCE!

This is not the first time we've had to challenge a BPO. Requesting to meet with the BPO agent, or by sending or producing copies of inspections and estimates, we can help the BPO agent, and in return, our clients, in reaching a fair market assessment of the property.

Pacita - BPO's are deal-killers. Sometimes I've had my information ignored by the BPO agent. You are right - it is utterly amazing the differences in quality that come out of some of those reports. Good for you to save the sale!

That's great advice, Wendy. CW closes files for the slightest of reasons, and it's a hard to get them reopened in a timely matter.

When they are dong external only bpo's and come up with a price without knowing the inside condition along with knowing it is listed and the bpo agent doesn't contact the listing agent for more detail, is doing a diservice for the bank in my opinion. We need to be more dilegent and as said here the banks have to move faster with their responses to the offers coming it. But they are so overwhelmed with all the information coming their way it is difficult at best to see them be able to return answers quicker.

Sue from Maine

Elizabeth - Thank you, Countrywide has made it tougher-- they've changed the game.

Sue - I think our bail-out money should be used to staff up the loss mitigation/short sale departments at these banks!

This blog does not allow anonymous comments