A "Short Sale" story -start to finish

Real Estate Agent with RE/MAX Executive

I started working with a young couple back in early July. They contacted me through my website and said they recognized the names on one the testimonials on my site and got a great recommendation from the past client.

They told me how they had been looking with another Realtor and were not happy after losing a home they wanted and so were searching for a new agent when they found me.

After a few conversations about our expectations of each other, we were off and running.

I set them up on my MLS automated email and they sent me a list of homes they wanted to see. they were all over the place in several towns. The very 1st 1 was an open house in Framingham July 20ish, listed at $389,900, just reduced from $409,900. I knew the agent and sent them to the open house with the agents permission. They loved the house and wanted to make an offer. I had discussed with them the ups and downs of short sales and how it could be a lengthy process. The Realtor on this home informed me that the sellers were working with an attorney and had started the negotiation process with the lenders (2 mortgages). This was a good sign as they were taking the right steps to make it work as smoothly as possible.

My clients in late July made a pretty low offer like 20% below asking price. The sellers didn't seem to flinch, they just said they would present it to the lender. I told my client, as part of the process the lender will have an appraisal done and probably counter offer based on that, assuming they are willing to work with the seller.

So the looooonnnnngggg slow process began.

We kept looking at houses as they were aware this may never come to a sale and they need to keep their options open.  Also, the seller did not want to sign the offer until the bank gave the go ahead. We found another bank owned home they liked in Marlboro and made an offer, this one was a great price but had a lot of damage. There were multiple bids and we lost this one. (probably a blessing in diguise).

We kept looking, every weekend and some weeknights. Always staying in touch with the listing broker in Framingham. All the while the house is still on the market and has had a price reduction, $375,000. Then  in mid October,(now 3 months from the initial offer the Realtor tells us they are getting close to a workout with the lenders-Great News!

Then on Oct. 31st, I see the listing come up as expired? Whats up with that?

The listing agent informs me the sellers have dumped her and are re-listing with another-unknown agent.  Here we are so close- yet  so far from a deal. I contact the sellers atty and she doesnt know anything about it.

 in November  it comes up as a new listing at $349,900 -WOW!!!! no showings til sunday open house.

My clients are freaking out!!! Where does our offer stand, we have been waiting for 3 months, they can't do this!!!!

Well of course they can, they never signed anything. But, why didnt they ever counter our offer? So, I contact the new listing agent who very curtly informs me we are welcome to re submit an offer and it will be presented with all other offers after the open house.

You can't imagine how upset my clients were, they wanted to sue, they wanted to pull the offer, etc.

So, they calmed down and decided to go to the open house undercover and see what was up! Well I got a call from the open house- THERE"S 40 PEOPLE HERE ITS A MAD HOUSE!!!! Well as it turns out the open house generated 2 more offers. We had to make counter offers and ended up getting the highest bid and closed in December at $356,000, 5 MONTHS after initial offer.

I still wonder if the sellers had ever countered to our initial offer, if they might not have gotten the same amount, with out all the drama. My clients initial offer was not their best offer it was just never countered!

 Oh well, it was a lot of work and a lot of stress for the buyers but, bottom line, they are very happy in their new home.

Comments (8)

Lisa Magee
Keller Williams Realty - Boiling Springs, SC

Sounds familiar -- although on a smaller scale!  I consider short sales a challenge, but love them when they work out well for my buyer client.  Thanks for your post.  I enjoyed reading about it.

Jan 22, 2009 01:49 AM
John Savignano
RE/MAX Executive - Hopkinton, MA
Realtor - Hopkinton and Metrowest MA Real Estate

They are a challenge, I think the important things going in are: your buyer client is made aware and understands the process and has the luxury of time to wait. and that you try and determine from the listing agent if they know the process and are taking proper steps to make it all happen.

Thanks, John

Jan 22, 2009 02:14 AM
Kay Van Kampen
RE/MAX Broker, RE/MAX - Springfield, MO
Realtor®, Springfield Mo Real Estate

Short sales are nightmares and I'm currently working 10 of them.  I am having luck getting them closed, however they are 10 times as much work.  Glad to see your clients bought the home they loved.

Jan 22, 2009 01:46 PM
Carol Lee
Dilbeck Real Estate - Oak Park, CA
Realtor - Agoura, Oak Park, Westlake CA Homes

Long story, great ending.  Out here, in So. Cal, the way it is supposed to be done is that the seller negotiates the offer, signs off, and then submits it to the bank for approval.  Whcih can still be several months, but...

I havne' had much luck closing any- most of my buyers have gotten fed up and walked, despite being told from the beginning what the process is like.  I have a buyer still hanigng in on one- supposedly we should be hearing soon....

Jan 22, 2009 03:40 PM
John Savignano
RE/MAX Executive - Hopkinton, MA
Realtor - Hopkinton and Metrowest MA Real Estate

Thanks for the input. I and I think most Realtors generally shy away from them, just because of what you describe.  I don't know the answer to making it smoother for sure, but in my case it seems that having the atty involved early on, kept things moving, however slowly, in the right direction. So I think getting the occasional updates from attorney was helpful. It did take 5 months!




Jan 22, 2009 10:04 PM
John Savignano
RE/MAX Executive - Hopkinton, MA
Realtor - Hopkinton and Metrowest MA Real Estate

Thats good news, they are closing! In this market 10 tough sales is better than no sales.

Regards, John

Jan 22, 2009 10:06 PM
Gail Robinson
William Raveis Real Estate - Southport, CT
CRS, GRI, e-PRO Fairfield County, CT

John - I haven't dealt with short-sales, but I hear the nightmare stories from other agents in my firm.  I did have a similar situation with a bank-owned property.  No counter to our offer, but they kept lowering the price on MLS.  I suggested to my client that they resubmit their bid at a higher level.  They did and then finally got a counter.  We countered back. Then the bank countered with a HIGHER offer than their last one.  So we countered with a LOWER offer than our last one.  The silliiness finally stopped after a month and they accepted our highest offer.  I always figure no counter is a communication meaning no interest.  It's not professional, but there's very little courtesy in short-sales or REO's.  If your client really wants the property and is willing to pay more then increase the offer in small increments.

Jan 24, 2009 05:09 PM
John Savignano
RE/MAX Executive - Hopkinton, MA
Realtor - Hopkinton and Metrowest MA Real Estate

Hi Gail, Your story sounds familiar with others I have experienced in dealing with bank owned homes. There is no rhyme or reason to how the banks respond. As I tell my clients - now you see why thes banks are in trouble!


Jan 25, 2009 01:01 AM