Just How Long a Short Sale Listing Can Take (Worst Case Scenario)

By
Real Estate Agent with Long and Foster REALTORS®, Gainesville, VA VA License # 0225089470

One year ago I took a short sale listing in a very targeted neighborhood; a 55+ community.  I knew it wouldn't be easy to find a buyer.  It wasn't.  Many price reductions (we were competing with the on-going new construction), we finally got a buyer to submit a very reasonable offer in late May of this year.

That same contract has been with Countrywide and their investor, Fannie Mae, since then.  Countrywide has ordered a total of 4 appraisals and 2 BPOs (Broker Price Opinion).  The problem is that Fannie Mae, the investors on this loan, has a completely unrealistic idea of the worth of the property.

The buyers submitted their own appraisal (if you are counting, that's #5) for reconciliation with Fannie Mae, as an answer to Fannie's unreasonable counter offer ($30K above the buyers own appraisal that will secure their loan).  That was July.  August was the last we heard from our negotiator.

There is a foreclosure sale date set for early December.  I can't believe that this listing will have been on the market for over one year by the time we get to that date.  I also can't believe that Countrywide and Fannie Mae will have had a market value offer for over 6 months only to have this property bought back by the bank on the sale date.

What a tremendous waste!  When I think of the government bailing out these companies, I want to scream.  I have put in one solid year on this listing, and got the bank the best result I can:  A MARKET VALUE OFFER.  Countrywide and Fannie Mae may as well have waded it up and threw the contract in the trash.

I would not have done anything differently.  I was hired by a wonderful couple that fell on the most challenging time of their lives.  I did the best I could to get the optium result from a bad situation.  While that didn't happen, I did make friends for life who will never forget the hard work I put into this.  They know, there are many Realtors who wouldn't have stuck it out this long. 

We could still (hypotheically) get an approval from Countrywide and Fannie Mae to close this deal, but at this point, I think it's more likely that pigs will fly, or Ralph Nader will be elected President next Tuesday. 

If you are experiencing the prospect of foreclosure, a short sale is soemthing that you have nothing to lose by trying.  But make sure you find a Realtor that is willing to stick out the fight with you.  As you can see, this is a trying process, but can get a better result in terms of the hit your credit rating will take.

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Rainmaker
61,090
Tami Vroma
West Michigan Real Estate Specialist-Five Star Real Estate - Grand Haven, MI
Realtor, Grand Rapids MI Real Estate

Amen Sister!  I have a listing that in July I had 4 offers on.  I am now down to one.  We got the offer July 19, 2008 and I have gotten one heck of a run-around by Chase Bank.  It took them three months to get me the payoff figures so I could do the estimated HUD-1.  As of last Monday it was suppose to be reviewed--it is suppose to take 30 days from submission of the full short sale package.  I have left several messages with the negotiator assigned and have gotten nothing!!!  UUGGHHHHHHH  These banks need to get it together.  I know it is much less expensive for them to do the short sale then it is to go into full foreclosure!  What is the matter with them!!!!!  I realize in the beginning it was a shock to their systems to be flooded with so many short sales and foreclosures but come on!!!  It has been a year!!  They better get some processess in place!!

Oct 29, 2008 01:15 AM #1
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Chris Ann Cleland
Long and Foster REALTORS®, Gainesville, VA - Bristow, VA
Associate Broker, Bristow, VA

Tami:  Sometimes, if there is mortgage insurance on the loans, the banks will stall and go to foreclosure as they get more money from the MI company.  You ought to find out if that is the case.  My experience is that banks are a heck of a lot quicker to foreclose on loans with MI.

Oct 29, 2008 01:34 AM #2
Rainmaker
221,048
Michael Wayne Jackson
Coldwell Banker - Novato, CA
Realtor - Seniors Real Estate Specialist Novato

It can be tough and long for these short sale listings. I had one that finally closed after 8 months of back and forth with Citimortgage being the first lender.

Nov 24, 2008 05:42 AM #3
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Chris Ann Cleland
Long and Foster REALTORS®, Gainesville, VA - Bristow, VA
Associate Broker, Bristow, VA

Mike:  It's tough getting the buyers to hang on during the process.  The banks will usually end up being agreeable because at the end of the day (or quarter) it's business.  The buyers get anxious and end up buying elsewhere.

Nov 24, 2008 06:20 AM #4
Rainmaker
540,593
Sergio Rebollo Jr.
Real Estate TeamMates - Miami, FL

Chris Ann....I feel for you.  This hard work goes to waste when banks either can't get to work the file as they should or they just stick to their guns.  Not sure how it is in your neck of the woods but I can share some crazy stories that just boggle your mind.  On the REO side, I know of one bank that rejected an offer at an aucion for $132,000 4 months ago when they had it listed at $155,000 and their listing price is now at $85,000 with no bites.  $50,000 they've lost for putzin' around and sticking to their guns!!!

Nov 24, 2008 10:26 AM #5
Rainmaker
284,761
Gene Allen
Fathom Realty - Cary, NC
Realty Consultant for Cary Real Estate

It seems like they would rather pay Peter than Paul and now you now why they are in the dumps.

Nov 24, 2008 11:23 AM #6
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Chris Ann Cleland
Long and Foster REALTORS®, Gainesville, VA - Bristow, VA
Associate Broker, Bristow, VA

Sergio:  It's the same here.  The gree of the banks are breaking a lot of would-be deals...deals that to me are consistent with market value offers.

Nov 24, 2008 12:40 PM #7
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Chris Ann Cleland
Long and Foster REALTORS®, Gainesville, VA - Bristow, VA
Associate Broker, Bristow, VA

Gene:  It is nothing that remotely makes sense to anyone in our business, but we have to keep plugging away at it.

Nov 24, 2008 12:41 PM #8
Rainer
21,743
Josh David
Bridgeview Bank Mortgage - Tampa, FL
Purchase Specialist... www.joshdavid.us

Hi Chris Ann, I can help you negotiate your short sales, w/no fee to your client(s), putting you in a listing agreement with your seller, and a commission agreement w/my company @ 2.5%?

Interested?

JD

704.998.7609

Nov 25, 2008 06:11 AM #9
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Chris Ann Cleland
Long and Foster REALTORS®, Gainesville, VA - Bristow, VA
Associate Broker, Bristow, VA

JD:  I've got no trouble doing it myself.  But thanks for the offer.

Nov 25, 2008 07:11 AM #10
Rainer
334,174
Paul Gapski
Berkshire Hathaway / Prudential Ca Realty - El Cajon, CA
619-504-8999,#1 Resource SD Relo

Well sometimes i dont know what to think of short sales. They are getting better and then they are not!

Aug 17, 2011 08:14 PM #11
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Chris Ann Cleland
Long and Foster REALTORS®, Gainesville, VA - Bristow, VA
Associate Broker, Bristow, VA

Paul:  I swear, I feel like I am in the movie Groundhog Day.  I swear I've seen this comment from you before.

Aug 18, 2011 02:12 AM #12
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