Do the Banks follow Any Rules when doing Short Sales

Lisa,

     It's sad to say there don't seem to be any rules for the banks or at least any that they'll acknowledge. In this area several brokers have started sending notices to the banks at listing stating that it is illegal for an entity (the bank) to negotiate the terms of a contract (the listing) which they are not a party to. Therefore commissions are not negotiable in short sale offers. This seems to be making some headway however it's clear some of the negotiators are making decisions on emotion and ego rather than what's best for all parties. Sorry to hear your story. I have started giving my buyer clients a clear picture of the short sale process. If they wish to proceed I will do so but most don't want to go through all that. These banks are shooting themselves in the foot. When the properties go to foreclosure everyone will get less. At least with a foreclosure we know what we're getting paid!

Lisa,

Banks seem to operate on "their" terms and their terms only.  I have not had good experiences with banks and prefer not to work them any longer.  I refuse to reduce my commission when a bank requests that I do... thus, I do not get bank-owned properties as a listing.  I have seen banks exhibit what I feel is unethical behavior to increase revenue from the sale of a property.  The worst one I've seen relates to a transaction that did not close on the contract date (mostly because the bank and their title company dragged their feet in getting the deal done) and the bank assessed an exorbitant per Diem penalty on the buyers; even though the buyers were not responsible for the deal not closing on time. 

Other agents work well with bank-owned properties; for me it is not a fit.  I prefer to avoid them like the plague!

Lisa, exactly why I have a difficult time recommending pursuing a short sale to my buyers. We are not, nor is the buyer's lender, able to do anything if the bank says "no."  It's kinda like cutting of their noses to spite their face. Then it goes to foreclosure and they get less. ;-)

There are not alot of short sales in Phila, PA and of course I get one of these few.  I listed the property 1/19/8 for 219k, under contract 1/24/8.  The bank sent the appraiser in April.  The buyers left.  The appraisal finally came back in June at 245K.  Again I relist and get under contract in 3 days.  Bank says they really want 260K, cut commission to 5% (I always charge 7%) and cannot understand why the second set of buyers do not want to close.  The bank has offered to allow the sellers (who are in no position financially to do so) to engage their own appraiser (this will be the 3rd appraisal) but refuse to allow it to be binding.  Long story short, my sellers are going into chapter 7 and the bank will lose thousands more.  Countrywide keeps changing the representative assigned to this account...last count was 7 different representatives.

Short sales can be a real pain, espeically when things like you mention above continue to happen. Maybe after the banks do hundreds of them their work ethic will improve, but for now, I think it'll be more of the same. If I were a buyer, unless I was getting the best deal around, I don't think I'd be the first in line either.

Lisa,

They follow the "Golden Rule", them withe the gold make the rules.

Jim