Note to short sale lenders: 1,000’s of Realtors are trying to help you. Please let us help.

By
Real Estate Agent with Keller Williams Realty Louisville East (502) 664-7827

The actual short sale drama below is just one of tens of thousands playing out right now. We can help lenders mitigate their losses. Lenders: Please help us help you.

Case in point:

Bank of America has stopped considering back taxes as an allowable closing cost.

We’ve been working on a fixer upper short sale for more than a year.

  • Must have had 40+ agents walk through.
  • Had about 10 different buyers submit offers ranging in the $80,000 to $115,000 range.
  • Had it under contract 4 different times.
  • BOA counter-offered the first 3 buyers into oblivion. Current buyer hanging on by a thread.
  • Met 6 BPO agents or full blown appraisers at the house. Not a typo! SIX different appraisers were sent.
  • One BPO agent sent in a value of $150,000, which is $35,000 higher than the highest offer we got, or 30% to 45% higher than 10 different buyers were willing to pay.

During the delays, the $8,000 tax credit expired which caused values to decline again.

Now that BOA dragged their feet for a year and blew off good buyers, there are $2,000 of unpaid property taxes.

BOA is unwilling to pay the back taxes. “Not an allowable closing cost” they say. The seller doesn’t have the money and the buyer is outraged and ready to walk.

Stepping over the dollars to get to the dimes

If BOA would have taken valid short sale offers we generated a year ago, there wouldn’t be any delinquent taxes, they wouldn’t have had to pay 6 different appraisers to give them unrealistically high opinions of value, and the list of extra costs to BOA goes on and on.  BOA or its investor lost at least $15,000 in foreclosure costs, appraisal fees, lost payments and many other incidentals.

Now that they’re running off the buyer with the $2,000 back property taxes, we’ll be back to square one. Again.

By the time we line up a new buyer who would pay the seller’s property taxes, or if it ultimately goes to auction, BOA will lose more than the $2,000 they’re demanding now.

Is BOA losing this money or is it being lost by an investor who is relying on BOA to service their loan?

Note to anyone from BOA or its investors who may be reading this blog: This case study is not an exception. Thousands of Realtors nationwide are trying to help you mitigate your losses. Please help us help you.

Respectfully,

Dave Halpern, Real Estate Broker, Louisville Short Sale Expert Realtors

(502) 664-7827

 

 

Posted by

 

 

Dave Halpern, Realtor

The Dave Halpern Real Estate Group

Keller Williams Realty Louisville East

Website David.DavidHalpernRealtor.com

(502) 664-7827

 

 

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Re-Blogged 3 times:

Re-Blogged By Re-Blogged At
  1. Marty and Laurie Gale 08/17/2010 03:11 AM
  2. Fernando Herboso - Broker for Maxus Realty Group 08/22/2010 12:29 AM
  3. Ellen Dittman 08/22/2010 12:49 AM
Topic:
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Short Sales Case Studies - The Good, The Bad and the Ugly
Tags:
property taxes
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foreclosure
short sale
allowable closing costs

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Rainmaker
722,437
Patrick White
Home Driven Realty, Inc - Baldwin, NY
Driven to bring New Yorkers home

Good Morning David,

Thanks for the post. Penny wise, pound foolish. Have a great day.

Jul 29, 2010 01:53 AM #1
Rainmaker
320,311
Kathy Torline
ERA Herman Group Real Estate - Colorado Springs, CO
Colorado Springs Real Estate Blog 719-287-1049

Love the blog post.   I had a BOA short sale I worked on for 16 months; also had similar statistics to yours.   The seller finally gave up, let it go to foreclosure.     It's an appalling process, there has to be a better way.

Jul 29, 2010 01:53 AM #2
Rainer
264,127
Bill Travis
Captain Bill Realty, LLC - Gilbert, AZ
Broker/Owner

It's unfortunate that the banks take so long and appear to be so petty, and demanding, in their negotiation process.

Jul 29, 2010 01:56 AM #3
Rainmaker
525,554
Dave Halpern
Keller Williams Realty Louisville East (502) 664-7827 - Louisville, KY
Louisville Short Sale Expert

Patrick - Thanks for stopping by.

Kathy - You and I are 2 out of thousands. Imagine if all of us would compile all of our case studies.

Bill - It defies common sense. Many loss mitigators are apologetic about the process but their hands are tied and they're on a recorded line so they can't really tell us what they think!

Jul 29, 2010 02:04 AM #4
Rainmaker
790,129
Carol Zingone
Berkshire Hathaway Home Services Florida Network Realty - Jacksonville Beach, FL
Global Realtor in Jax Beach, FL - ABR, CRS, CIPS
Great post - I have heard similar stories as we all have & it just amazes me the banks cannot seem to get these deals closed in any reasonable period of time.
Jul 29, 2010 02:12 AM #5
Rainmaker
637,816
Don Sabinske
Don Sabinske, Sabinske & Associates Inc. - Zimmerman, MN
Sabinske & Associates Inc.

You have my back.  Thanks for this post.  I would love to send it to every short sale negotiator I am working with.  Unfortunately, they seem to change from day to day, and then I have to fax the same 100 pages to them AGAIN.  And, start from scratch.  Unbeleivable how the taxpayer and client money is wasted.  Glad I am not a BoA customer. 

Jul 30, 2010 02:26 PM #6
Rainmaker
3,255,302
Sally K. & David L. Hanson
EXP Realty 414-525-0563 - Brookfield, WI
WI Realtors - Luxury - Divorce

We have not yet had such disasters...yicks...we encourage you to share this blog with NAR and your elected representatives.....and thank you for sharing it on the Rain...the only way we can change things is by raising many voices to the right sources.

Aug 22, 2010 12:53 AM #7
Rainmaker
1,048,895
Bill Gassett
RE/MAX Executive Realty - Hopkinton, MA
Metrowest Massachusetts Real Estate

Dave nobody ever said lenders were smart. There is a reason we are in this mess!

Aug 22, 2010 01:03 AM #8
Rainer
264,127
Bill Travis
Captain Bill Realty, LLC - Gilbert, AZ
Broker/Owner

Just to add to the comment I made earlier. I agree that the banks are making things worse.

  • However, is the buyer getting a bargain on the property?
  • If the buyer paid the $2000 would she still be getting a bargain?

Buyers shouldn't let a deal fall through for a few dollars if they are still going to be getting a bargain.

We had a short sale that sold for $250k and the buyer was getting a real bargain. The bank wanted the seller to pay $10k with a 7 year no interest note. The seller refused. The buyer knew that he was getting a bargain and agreed to take on the 10k. The deal we made with the bank was this.

  • The bank insisted the note be issued to the seller.
  • The buyer made a written agreement to bring $10k cash to closing to pay off the sellers note.
  • So the seller signed the note and at escrow the buyer paid it off with his 10k.
  • Everyone was happy.

While we may like to punish the bank by not doing the deal and letting them lose it to foreclosure, that doesn't help our clients. If there is a way to salvage the deal with buyer and seller coming out ok, then we should do that.

Aug 22, 2010 02:19 AM #9
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Rainmaker
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Dave Halpern

Louisville Short Sale Expert
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