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Hello all,
I am a first home buyer who put an offer on a short sale back in January! After a long wait, finally two months ago we heard from the sales agent that the bank had approved our offer, but they still needed to get an approval from Freddie Mac. After more wait and no call replies, we heard from the sales agent last week telling us that the offer had been approved by both the bank and Freddie Mac, though our agent did not get an approval letter but only a verbal approval.
The sales agent said we should be getting the approval letter within 2 or 3 days but instead we got an adendum with several changes and new conditions that are very risky and not favorable to us. We were specially concerned about a condition that says that any difference between the amount the seller's bank has approved will need to be brought and paid by us. Also, the time frame for the loan commitment letter is too tight.
I am so upset about this. We waited for such a long time and were always promised and told the offer was practically accepted. My question is: can the conditions be changed like that? I just feel that the sales agent was dishonest. We were about to withdraw from this offer in two occasions but were always persuaded to wait a little more.
We now have a backup offer on another property, but missed chances of submitting offers on other properties that are already sold by now.
Your thoughts and opinons in this matter will be greatly appreciated.
It's been my experience that the lenders often amend a sales contract with some of their terms. I think the one item asking you to pay the difference between the loan balance and the sales price is ridiculous. This is the seller's responsibility not yours.
Basically by injecting additional terms, the bank has rejected your offer.
Sounds like short sale SOP to me.
You probably are in the driver's seat now, to decide whether to walk, proceed, or continue to negotiate.
Read your offer and speak with your agent regarding your options.
Bummer to spend all the time for a potential whack in the head. This is why short sales are NOT for people who need timely responses and advancement of the transaction.
Last edited by MikeJaquish; 07-02-2009 at 08:19 AM..
Reason: Changed "contract" to "offer."
Yep. That's a rejection of your offer and if you are buying the balance of the loan, that isn't a short sale, lol. So..I suggest you speak with your agent, send over a rejection, restating your terms and walk if they don't accept it. Unfortunately this stuff happens. Now is time for the negotiator to get tough, resend comps justifying why there should be a short sale to the price you have offered and push hard to get it through.
Sorry to hear you had to wait so long to get that answer. I know the feeling of wanting to walk, then getting talked into waiting it out. They can work out, but from what I have read, chances are slim. We were in negotiations for our short sale for 4 months and a day until the bank accepted with a slight counter offer, but we are set to close next Friday. There are other homes out there, just look at this as an experience. I compare short sales to time share sales pitches, you will only do it once!
Last edited by Norsky1; 07-02-2009 at 09:45 AM..
Reason: added stuff
Janosiki,
Short sales do take a long time and especially being a first time home buyer, I know the excitement. I apologize for your realtor leading you on. He/She should have never said that it was accepted without seeing the approval letter. Especially when working with short sales. No, your offer was not accepted. If it was, the bank would accept it with your terms. Also, the bank stating that you pay the difference is not heard of. It is the seller's responsibility to do this. The bank is supposed to send them a 1099 or 1098 whichever it is. Your agent should do what palmcoasting is saying. Send comps to prove that the price is sufficient for the home. I first sent an offer and the bank rejected coming back with a higher offer. The bank sent out their appraisers and the appraisal amounts were way off from what comps were coming in at. I called and fought this process by comps. My clients actually got the home for less than what the bank said in the beginning that they had to have...reasoning, I had substantial evidence to prove my theory.
I feel like we should be writing books for the morons that the lenders are letting make these decisions about how NOT to conduct short sales!
If they want investors to scoop these things up they should do CASH ONLY auctions and blow these out any way they can.
If they really want to appeal to actual "I want to live here" home buyers they need to be upfront and decisive.
The lack of professionalism and organization that the people are demonstrating is disgraceful.
I get the sick feeling that if these screw-ups that people keep posting about are as wide spread as it appears there are going to be "interventions" by the likes of Barney Frank that will only make things worse.
Seems pretty clear that any lender that has a functioning brain should be switching OUT of the short sale mindset altogether and working much harder to redo as many loans as needed to get the current borrower to a point where they can afford the payment. If that means making 30 year loans into 40 year loans and putting up with rates far lower than they could charge so that the borrower can stay current than THAT makes a lot more sense than ripping apart deals over and over!
Yes, but (here we go again) Fannie/Freddie are back to 125% LTV. The one catch this time though is the borrower has to prove the ability to repay the loan. We'll see how far that gets.
Thank you all for your comments. Our agent spoke again to the sales agent and asked once more for the approval letter since she assured us reassured us we were approved. Sales agent then told him she would only show us the letter if we sign the adendum!! This happened on Friday and we all decided to withdraw from this since there was no way we were going to agree to those conditions.
What's more frustrating to us is that yesterday the property appeared under contract.
Now we're looking for homes again, and hopefully next time we'll have better luck or at least I hope we deal with a honest agent.
Quote:
"I do know that banks are holding onto inventory, and what they're doing is they're metering them out at an appropriate level to what the market will bear," says Pat Lashinsky, chief executive of online brokerage site ZipRealty.
He says this strategy has paid off for banks — even if it also pushes a full housing recovery further out.
"By not flooding the market, they were getting better pricing on the homes that they owned," Lashinsky says. "And instead of people coming in and offering less than what the prices were, they were ending up in multiple-offer situations and getting more for the homes."
End Quote.
OP, you might be better off not getting this house, since there will be a lot more houses on the market as the jobless rate grow and the banks continue release their foreclosure houses for sale.
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