Thursday, July 10, 2008

My Short Sale Offer & Moving Trucks

Hi, Frank.

I have a problem and wondered if you've addressed it on your blog. My husband and I made an offer on a home. According to the remarks in the listing, it's an approved short sale. The listing agent (the guy really needs to learn understandable English or my agent should let me talk to him since I speak his language!) said that the bank would accept an offer for the approved price and offer 3% in closing costs. Our full-price offer went in the morning of July 2.

My on-the-ball realtor couldn't reach him until Tuesday of this week to confirm receipt. (The guy doesn't return phone calls.) He had forwarded the offer to the asset manager, who responded that he would have an answer by Thursday (today). Today, the asset manager said the bank needs another two weeks. Is this standard?! I had hoped to have movers come in three weeks in anticipation of closing in four to five weeks. (This is a cross-country move.) From my perspective, I think they're hoping for a better offer over asking price. I've looked at the comps and the asking price is right on target.

When my agent originally called the LA after the showing last week to find out specifics for submitting an offer, the LA told her that he already had an offer on it for $25K less than what we planned to offer. She thought it odd that he shared that info with her (he wasn't the only agent to "disclose" other offers.) I don't trust the LA not to share the amount we offered in hopes of a higher offer in this two-week interim. To his credit, both he and the homeowner are calling the bank every day trying to get this offer pushed through (or so he says).

Is there some kind of law that prohibits this type of bank stalling tactic? It does not seem fair. A homeowner can't do this. What allows a bank to do it? And, is there anything a buyer can do aside from submit a ridiculously high offer? Any insights you have would be greatly appreciated. I'm just looking for a second perspective (especially considering my agent is out of town for the next two days and I'm driving myself crazy with worry--we NEED a house before school starts!).
Thanks so much.

Frank's Answer:
Evelyn, Sorry, but you are nuts! Moving across the country to a short sale? The only thing worse would be if you used the Listing Agent as your agent (dual agency). I got a nearly identical email last week about how she is now homeless (sold her place already).

To answer your question, Hell no! There is no law (I am not a lawyer) that requires somebody to ratify a contract quickly. My guess is you didn't ask the 10 questions to ask every short sale and did your agent look at the agent's track record to see if they have ever closed one. If they haven't, I would give it a 1 in 12 chance of closing (was 1 in 20 in Feb).

You have to start looking elsewhere. As for the listing agent saying it was "bank approved," I really wonder. If that is true, that the bank approved list price and a seller subsidy, there should NOT be any stalling. Banks don't care enough. If their chain of command approved X, and you offer X, who gets a bonus if they get X plus 1? Nobody. I don't think the listing agent is trying to get a bigger commission, so it is probably NOT bank approved.

Again, these "steals of a deal" are bogus.

And what people constantly misunderstand is they initially say "oh I can be patient in order to save $20,000." But it isn't a matter of patience. If only 1 in 10-20 close, and it can take 3-4 months, do the math... that means 3-4 years to get a home.

I would ONLY let my clients consider a short sale if there is a competent Listing Agent that has done them before.

Written by Frank Borges LL0Sa


Anonymous said...

Thanks for the info. We got the answers to about half of those questions. Either the listing agent flat out LIED or there are some major language barriers. We didn't consider any short sales properties unless they were listed as approved (and our realtor called to confirm the listings before we looked at them). Fortunately, we're not out of house and home yet, just patience. Looks like I'll be making another trip to DC. Thanks for taking the time to answer my questions.

FRANK LL0SA Va Broker- said...

You are welcome. Sorry about that. I don't think he lied, I think he might have been confused or overwhelmed.

Anonymous said...

Hi, Frank.

I took your advice. We backed out of the approved short sale (the LA's internet connection was down for a week, so who knows if the bank ever did respond!) and I flew back out for another go at house hunting. We found a healthy sale (albeit, more than we originally intended to spend, but not by much) and close on Aug. 20. Just one major problem with the house--the basement does not have an exit door or egress window. Looks like we'll be adding one. Other than that, it fits the bill and the time frame. Thanks for taking the time to answer my questions.


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