Country Wide

[Bobby J]

I am thinking seriously about becoming a beach property owner again (I sold my condo in late 2004). My agent has advised me against short sales, saying they are a waste of time.
This thread seems to support his premise. Why would I wait 6 or 7 months to find out if my offer has been accepted when there appears to be an abundance of reasonably priced non short sale properties on the market? Especially if in the case of short sales "low ball offers are a waste of time".
It seems to me you could find a much better deal from someone who needs to sell and bought before all the craziness.

mikeyboy

It's not that clear cut. Some short sales are easy. I have done a few with Regions that were great and wrapped up in 30 days. It depends on the bank and where the short sale stands. I also advise once under contract getting with a closing attorney that handles them from the start to the finish. In my short sale package I actually have forms that she signs that allow her to now begin to work directly with the sellers bank. We then go get another contract. Short sales can be a waste of time but you can tell right away when you talk with the listing agent. First questions, how long has this been listed as a short sale? Where is the bank on this one and has a BPO been ordered? Does the seller have all the proper Docs filed? How late is the note? What is the original mortgage and is their a second (this helps for low ball offers)? Have you ever done a short sale? If not, are you willing to let me turn this package over to a title company that has?

 

[AAbsolute]

In a short sale, the seller is getting nothing. He's selling for less than he owes the bank. There's no profit in it for him whatsoever. The reason sellers try for short sales versus letting the property fall into foreclosure is to try to salvage their credit. On average, short sales reduced credit scores by about 100 points, foreclosures by about 200. That was before most lenders required you to be delinquent before even discussing the possibility of a short sale with you.

And Shelly, funny how Ms. Corcoran advised the buyer to wait for the foreclosure. A week or two ago, she advised an upside down seller on The Today Show to pursue a short sale with his lender. The woman is a complete flake. How she garnered the "expert" moniker is beyond me.

I just don't remember ever seeing this provision in my loan doc's at closing. I'm from the party of personal responsibility.

So is it o.k. for me to pummel the other party in a business transaction like a gorilla just because I can, it's legal and it is beneficial to me?

 

[Smiling JOe]

I thought it a tad odd too--but in your comment above you still note that the seller "might" not accept an offer (Babs didn't give examples--*will you?). If there is even a chance that the owner would have reason to reject any offer, then they are an obstacle a buyer can just as well do without.

(*I'm guessing one reason might be a "perceived" super low ball bid that the owner fears will halt the progress of unloading the property as the offer makes its way through the system.)

BINGO. By MLS rules, if the seller accepts the offer, it becomes a contract. If a listing is under contract, it must be moved into pending, and is no longer showing in the MLS as active, nor on any real estate websites. A seller has to consider that when the offer is so low that the lender wouldn't likely approve it anyway, though the lender may take two months to even respond, if they respond at all.

I will note that according to the short-sale addendum to the contract, it provides that a seller can continue to market the property once under contract, unless both seller and buyer agree otherwise in writing. However, according to the MLS rules, they cannot keep it listed as "active," in the MLS.

 

[Smiling JOe]

It seems the system is slowing shifting responsibility from the owner who created the transaction over to the bank as the responsible party who in turn will be shifting responsibility to a government bail out.

I know the path is not that clear, but I see and hear a lot of grown ups looking to shift responsibility.

The path is very clear to me, but it is the lenders who are pushing that, not the sellers.

 

[Miss Critter]

I just don't remember ever seeing this provision in my loan doc's at closing. I'm from the party of personal responsibility.

So is it o.k. for me to pummel the other party in a business transaction like a gorilla just because I can, it's legal and it is beneficial to me?

You'll have to help me understand you here. Who's pummelling anyone? In most cases, the buyer just wants the property sold, but if it's being sold at a loss to the lender, then the buyer has no say in the sale amount. Most, if not all, of these properties are ultimately going to foreclosure anyway. There may be a handful of sellers with lots of cash who just don't want to make payments anymore, but I believe they are a small minority. Not many sellers who can afford to keep making payments are going to allow their credit to be destroyed in a cavalier fashion. I believe most short sales are a last ditch effort on the seller's behalf to avoid foreclosure.

 

[Smiling JOe]

You'll have to help me understand you here. Who's pummelling anyone? In most cases, the buyer just wants the property sold, but if it's being sold at a loss to the lender, then the buyer has no say in the sale amount. Most, if not all, of these properties are ultimately going to foreclosure anyway. There may be a handful of sellers with lots of cash who just don't want to make payments anymore, but I believe they are a small minority. Not many sellers who can afford to keep making payments are going to allow their credit to be destroyed in a cavalier fashion. I believe most short sales are a last ditch effort on the seller's behalf to avoid foreclosure.

I know what you are trying to say, but to lessen confusion for others who are learning about short-sales, I'd like to correct the bold text above. I think you meant to say the "seller" has no say, but the truth is that the seller does in fact have a say, because they are the owner, not the lender. ( Also, it will be the seller who may be paying taxes on the amount of debt forgiven.) Of course the buyer has ultimate say, because without a buyer, there would be no market.

 

[Miss Critter]

I know what you are trying to say, but to lessen confusion for others who are learning about short-sales, I'd like to correct the bold text above. I think you meant to say the "seller" has no say, but the truth is that the seller does in fact have a say, because they are the owner, not the lender. ( Also, it will be the seller who may be paying taxes on the amount of debt forgiven.) Of course the buyer has ultimate say, because without a buyer, there would be no market.

Your correction is correct. Thanks, SJ.

 

[AAbsolute]

You'll have to help me understand you here. Who's pummelling anyone? In most cases, the buyer just wants the property sold, but if it's being sold at a loss to the lender, then the buyer has no say in the sale amount. Most, if not all, of these properties are ultimately going to foreclosure anyway. There may be a handful of sellers with lots of cash who just don't want to make payments anymore, but I believe they are a small minority. Not many sellers who can afford to keep making payments are going to allow their credit to be destroyed in a cavalier fashion. I believe most short sales are a last ditch effort on the seller's behalf to avoid foreclosure.

So it is your belief that the majority of the 500% increase in Walton County Lis Pendens is due to people who have lost their ability to pay their mortgage? I thought until now that the majority of the stopped payments were due to people letting the property go instead of depleting all of their savings.

I don't know the real answer. I do know that unemployment has not gone up by the same percentage. I also know for sure that there are people trying to move property as short sale who do have funds to keep current.

 

[Smiling JOe]

AAbsolute, it is up to the lenders to determine whether or not someone has enough assets to allow a short sale. A person cannot just say they want to have a short sale because they are upside-down.

 

[SHELLY]

AAbsolute, it is up to the lenders to determine whether or not someone has enough assets to allow a short sale. A person cannot just say they want to have a short sale because they are upside-down.

I'm betting that a lot of these folks once had enough assets, but those short-selling in the more "upscale" locales shouldn't have invested in the first place or had their income tied to the RE boom in some way, shape or form--am I right?

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