Home > Blogs > Sabrina Kelley > Colorado Mountain Homes Real Estate: Mountain Homes In Teller & Park County & Colorado Springs

Bank Owned Homes and Short Sale Woes

By Sabrina Kelley

Real Estate Agent with ERA Herman Group Real Estate

January 25, 2009 05:59 PM

I have buyers who are looking at banked owned homes. Saturday I showed them a home that was a complete condemned sign disaster. I won't go into the horrific details but we all needed a shower and a launder of our clothes after the experience. It is sad when a home is so severely neglected and abused that it is no longer salvageable by a short sale or by a bank auction.

I came across an article this week in an industry magazine. The subject of the article was how many short sale offers are rejected by the bank. The bank then comes in and buys the home and it goes back on the market. Some agents are seeing these same homes then sale for a price that is lower than the price which the bank rejected in initial offers. It seems to me that this entire process is holding up sales of homes.

I have heard the Orlando and Phoenix are going to open up a test program for getting foreclosed homes sold more quickly. I am always looking for more ways to find available opportunities to get my buyers into the homes that they want. I hate to see banks holding up the process because of the way the current bureaucracy is structured.

Despite the current circumstances that give me constant headaches and a whole new industry learning curve, I am managing to stay positive and optimistic that solutions to these issues will arrive shortly.

Re-Blog

Comments(11)

Comment

Show All Comments

Sort:

Robert Havana

Park and Protect- Alberta Real Estate License Parking - Calgary, AB

Alberta Real Estate License Parking

I agree. There really needs to be some sort of reliable consistent method for these homes to become available for sale and a concrete process for the sale to follow. The lenders do not behave like typical vendors and they are themselves contributing to the uncertainty in the market because they have no idea what the heck they are doing.

Jan 25, 2009 06:12 PM

Troy Erickson AZ Realtor (602) 295-6807

HomeSmart - Chandler, AZ

Your Chandler, Ahwatukee, and East Valley Realtor

Sabrina, I am not sure at all what the answer is. I am in Arizona, and have heard that they are testing a process to get approvals on short sales faster. I am sure that I will blog about it when I find out more. I know that 43% of total homes sold in Maricopa County in 2008 were foreclosures, and that is not a good sign.

Jan 25, 2009 06:13 PM

Ann Heitland

Retired from RE/MAX Peak Properties - Flagstaff, AZ

Retired from Flagstaff Real Estate Sales

I am seeing a slight bit more rationality in short sales, but I do not have a scientific sample. It's irrational business looking in from the outside to these banks - I think it's a staff problem: they fired the wrong people.

Jan 26, 2009 08:16 AM

Sabrina Kelley

ERA Herman Group Real Estate - Woodland Park, CO

Woodland Park Colorado Mountain Homes and Land

Troy, Robert, and Ann,

I think that we would all agree that the banks are understaffed but why don't they hire professionals who are able to handle at least a response on short sales? Also, why are banks not letting homes go for low prices?

Homeowners are losing money on homes due to depreciation rates in the range of 5 to 7% in some markets and their homes are in great condition. Why do banks think or practice an idea where they believe that they can get more for homes by making home owners, agents and buyers wait?

Troy,

Your numbers blow me away. I didn't know the Phoenix area was approaching the 50% numbers. It is becoming surreal.

Jan 26, 2009 08:30 AM

Mary Douglas

United Country Ponderosa Realty, Red Feather Lakes, Colorado - Red Feather Lakes, CO

REALTOR, Red Feather Lakes, Colorado

Hi Sabrina, I can't explain it....It seems like the banks leave money on the table when they don't negotiate the short sale, and then sell for less after foreclosure. This is after they incur all the attorney costs, title insurance, Public Trustee fees....for the foreclosure! Oh...not to mention more lost "interest" on the loan. You're right- it doesn't make sense! I hope there is a better solution- currently I just don't know what it is :-)

Jan 26, 2009 09:04 AM

It is good to know that other agents are having the same issues. I am not the only dingey in the sea of short sales who is being battered by the waves of banking.

Jan 26, 2009 09:21 AM

Ricki Eichler McCallum

CastNet Realty - Corpus Christi, TX

Broker,GRI,ABR, e-Pro, TAHS

Sabrina, You are so right but this problem has always existed at least since the 80's when I was selling lots of foreclosures. They haven't learned any different since then. So when I show these homes I educate my buyers on how long it could take and to expect the unexpected and the unpredictable because nothing about the process makes any common sense. :)

Jan 26, 2009 11:30 AM

Regina P. Brown

MBA Broker Consultants - Carlsbad, CA

M.B.A., Broker, Instructor

Sabrina, don't hold your breath waiting for these lenders to get their acts together! They have a consistent habit of making bad business decisions, that's why they're in this mess to begin with. Just look at CitiBank today, buying a private jet for $45M (that's MILLION).

Join my new AR group and post your blog at http://activerain.com/groups/virtualoffice

Jan 27, 2009 04:30 PM

Thanks Ricki and Regina. I will quit holding my breath because I am tuning blue with waiting on the banks at this point. My buyers understand the process but it doesn't make the waiting any easier. Especially when you suspect the banks are going to come back with a rejection on an offer that really is legitimate and sound.

Jan 28, 2009 08:52 AM

Debi Boucher

Real Estate Showcase Photography - Woodland Park, CO

"Realtor Showcase" - Real Estate Photography/Virtual Tours

Sabrina - How about this for idocy?

The homeowner moves out, calls the power company to have the power shut off. Can't do that without a minimum charge, they're told, until the bank puts the property in their name. Property is finally recorded in the banks' name, (Former)owner calls the power company, who says the bank has to call them. OK. (Former) owner calls and tells the bank to call the power company, or (Former) owner will have the eletrical boxes from the property removed (power company's advice to (Former)owner). Owner calls and tells the bank, bank says they won't call the power company to put the electrical in their name, go ahead and have the boxes removed.

The expense to replace the electrical box on the property after it has been removed, is around 3500 dollars!

Someone please tell me where is the sense in that? I'm sorry. We're just not dealing with rationally thinking people.

Debi

Jan 31, 2009 11:46 AM

Unbelievable!! Unreal!! Will there ever be any accountability for this fiasco?

Feb 01, 2009 11:14 AM

Bank Owned Homes and Short Sale Woes

Comments(11)

Sabrina Kelley

Real Estate Resources

Recent Posts

Additional Information