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Short Sale Lender Loses $50K Refusing AUCTION CASH

By
Services for Real Estate Pros with The Auctionarium

Property facts:

Brand new 3,600 Sq Ft custom 5 bed 4 bath home on 1.1 Acre lot in exclusive subdivision with no POA fees or hassles outside Snow Hill in Worcester County Maryland.

New Home equity erosion

$535,000.00 Pre-construction appraisal June 2006

$485,000.00 loaned July 2006

$3,600.00 only payment made on home August 2006 before the seller lost his job

$347,000.00 BPO Pre-foreclosure Broker Price Opinion January 2007

$351,000.00 February 2007 Auction cash on the table 30-day AS IS close

$421,000.00 Amount Freemont Savings would accept for a short sale

$394,000.00 March 2007 Foreclosure buyback amount on Courthouse Steps

$331,500.00 September 2007 REO Sale Amount to buyer who discovered property through auction marketing & dealt direct with REO management company (not lender) and beat them down $20,000.00 AFTER $50k foreclosure expenses and property damages.

The lender had been contacted and prepared for a ‘short-sale' by the auctioneer who delivered a complete package. The lender Freemont Savings was given a ‘cease and desist' by the FDIC to stop 80% - 20% sub prime loans such as this during the marketing period and laid off thousands of employees.

The Village of Nassawango is a very desirable community with senior county officials and many business executives calling it home for the large lots, secluded atmosphere, and private community setting without the hassles of expenses of a home owners association.

As one of only 321 Accredited Auctioneers of Real Estate (A.A.R.E.) in the USA the level of service offered by my company simply higher than 99.0% of the real estate professionals in the marketplace are capable of offering.

Lenders still refuse to deal with reality

Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

This is an amazing story. 

It just shows the myopic thinking of the banks and mortgage houses.  They have been calling the shots for so long, they are not capable of acknowledging the fact that they are either going to take losses on these sale or choke on them.

Wonderful post.  You spelled it out perfectly.  I could just watch the price slide down. 

I flagged this for feature.  Good luck.

 

Dec 08, 2007 09:27 AM
Jason Smith
DreamDirt Auction - Mondamin, IA
Interesting story that shows auctioneers can do everything a Realtor can, just faster!
Dec 08, 2007 12:56 PM
Rich Kruse
Gryphon USA, Ltd. - Columbus, OH

Hey Billy,

Are you getting away with charging no sale fees out there?  I haven't been trying, but just got a call from a consumer seller and I've been thinking about it.

Dec 09, 2007 12:42 AM
Melanie Ross
Coldwell Banker Solano Pacific - Benicia, CA
Benicia CA & Vallejo CA Real Estate, 707-319-2828
very interesting.  This is the type of info we need to help us understand what is going on.
Dec 09, 2007 04:08 AM
Billy Burke
The Auctionarium - Altadena, CA
CAI - AARE

Rich:

Yes we charge no sale fees and this was right at $10,000

 But the seller was broke, in foreclosure and had moved.

We settled for the new stainless steel refrigerator - freezer combo that they were going to lose anyways because it was personal property.

We will not accept an auction listing without the no-sale fee clause

Jason:

The marketing comparison of what we did as auctioneers compared to the listing realtor was night and day.

Melanie:

The problem is worsened by the NAR sending out press releases saying property values hve only dropped 1.2% to 5.6% when the truth is they have dropped 20% to 60% across the board.

 

Dec 09, 2007 05:06 AM
Anonymous
Jason Childs of The Short Sales Group,LLC
I had one very similar $135,000 owed. The house froze when the tenant left.   We got an offer for $60,000 and fought with the bank for 8 months about it as all other offers were far less.  The bank finally said yes and at the last minute  5:30 pm  on Monday they called and said if you don't close it tomorrow (Tuesday) the deal is off.  The crazy thing here is that we had the closing scheduled for Thursday at 2 pm.   So i told them if they don't take this deal they will lose far more it fell on deaf ears.  6 months later after many price reductions by the REO agent the home sold for $40k.  As the saying goes a bird in the hand is worth 2 in the bush.  Well if you calculate out all the costs involved with it that is about right.  There is little intelligent life at a bank.
Feb 18, 2008 11:58 PM
#6
Rosemary Brooks
BMC Real Estate - 209-910-3706 - Stockton, CA
The Mother & Daughter Realty Team
Great post and story, thanks for sharing.  Auctioning is an area I am watching and doing research on.  Bookmarked.
Feb 29, 2008 11:06 PM
Anonymous
Bev Clark

DO you have an email list that will send me the proeprties in Northern VA and SOuthern WVA?

 

Thank oyu,

Mar 04, 2009 10:49 PM
#8