By now everyone probably knows what a short sale is. I wonder who decided on the name short sale? It definitely wasn’t the Realtor, or the buyer. Or the seller for that matter. I know the name comes from the fact that the sale is “short” of the amount owed on the current mortgage. But by the time everyone is engaged in the process, we are all thinking we should call these things long sales.
The last short sale I closed took 9 months from listing to closing. I represented the seller (my listing). We had two buyers in the process. The first one didn’t close. We learned from that and the second one did.
I represent buyers on short sales too. Every once in a while I’m lucky enough to run into a short sale that has been under contract and the deal fell through. Do you think it’s funny I would say that’s lucky? Well, if the listing agent was on top of things, they should have been able to determine the price the bank will take for the property. In that case my buyer might close in 30-60 days.
I’m working on one now that has been listed (my listing) for 9 months and our buyer just walked away. They hung in there for 6 months. I guess everyone has limits to their patience.
Now the bank is ordering their 4th Broker Price Opinion (BPO). That’s sort of like an appraisal. Except a Realtor does it instead. The bank is not ordering a 4th BPO so they will be sure what the price really should be. They’re ordering a 4th BPO because they keep letting the previous one expire. BPOs are only valid for 60 days. They order a price opinion and then cannot make a decision before it expires. Now that’s slow!
Something really needs to be done about this. Do banks want to participate in short sales, or not?
There is yet another a new government program called Home Affordable Foreclosure Alternatives (HAFA) that is supposed to streamline the short sale process. One of the key components is that the Realtor, homeowner, and the bank sit down and decide on a list price that will sell and an amount the bank will accept. Upfront. Now there’s an idea. Wonder if banks will adopt the new program. It’s brand new, so time will tell.
I am currently involved in buying a home (I think) that is a short sale property after reading your material I almost wish that I would have offered them the upfront asking price in Lieu of haggling. I bought a home years ago and the way that went was they asked for an amount I offered them say $10.000 less they countered at $5.000 less and we were all happy. I am fearing that this is not true in short sales. That comes as bad news because we have already waited a month for the owner to accept our proposal, sign the contract, and mail it back to us , because he was somewhere that he didn’t have access to email or fax capabilities. but I thought that once he accepted it was a go. Am I to understand that now his bank has to accept also? Please say no regretfully Kaye Caffrey
Hi Kaye – Sorry to be the one to tell you, but ALL short sales must be approved by the bank. The bank is loosing money, sometimes lots of money, so they have to agree to mark the mortgage note as “satisfied” at closing. Otherwise, the title cannot transfer to a new owner. There is definitely a strategy involved with both pricing and making an offer on short sales. Did you have a real estate agent involved who represented you?