The short sale process is Grinding To Halt, or at least chilling to a slow freeze.
The banks just keep moving slower and slower. Can You Hear the sound of money, rotting?
I have friends who wrote on a short sale almost two months ago. Not my clients - I referred them to somebody who is TOP NOTCH since I no longer practice. The bank has not responded yet. It goes up for sheriff sale next week. The offer is at 80% of asking price.
HELLO MR BANKER!!!!! THESE ARE DEPRECIATING ASSETS. They don't get better with age... Money is rotting in your REO portfolio and you don't seem to be aware of it!
The banks did this to themselves by trying to play both ends against the middle. It started with their long term practice of arrogant refusal to recognize a little something in real estate law called "STATUTE OF FRAUDS". This law says sales agreements are required to be in writing. Banks have long refused to accept in writing. Instead they routinely offer verbal acceptance with the caveat that if a better offer comes along they will take it. Now it has gotten so bad they don't even acknowledge the offer or give verbal acceptance for 30-60 days or more.
Finally, area agents have had enough and no longer want to show or write on short sales.
Toledo Realtors are reporting that Loss Mitigation departments at major mortgage lenders are telling buyers the following when the agent calls to confirm receipt of offer:
- I am not sure if we have received your offer yet
- I can't tell if we received your hardship letter, because our files are in Texas and I am in Boston.
- It could take a few weeks to get your documents logged into the file.
- If we do have your offer, it will take 30 - 45 days to assign a case manager or negotiator.
- Negotiation could take several weeks.
- It would be normal for you to have to wait 2 weeks or more for a simple response to a document or phone call once negotiation begins.
- We cannot accept the offer in writing yet. It may take until a few days before closing.
- Until then, if we get a better offer, we will take it.
- I would love to help you but the Sheriff sale is scheduled for tomorrow and your offer is not here as near as I can tell...
Potential buyers, with good credit, and walking away in frustration... They want to buy a house. I mean C'MON - these kind of buyers are not exactly a dime a dozen these days. Who can blame them for bailing?
How long will it take for the banks to realize they have to answer offers promptly, accept in writing, and close within reasonable time periods if they want to get dead weight REO off their books?
These Bank people are supposed to be smart about money. So why are they treating these short sale properties like canned goods instead of the perishable products (DEPRECIATING ASSETS) that they are?
Buyers who are looking for bargains are encouraged to shop foreclosed properties and steer clear of short sales!
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