Why is it STILL so difficult to purchase a short or foreclosure property? (short sales, real estate)

[40Flier]

I was tempted to respond to the thread "wondering if this is the year?"

We're a week beyond finally closing on a Ft Myers foreclosed condo and wondering why it has to be this crazy? We spent many weeks last winter (and a subsequent trip) shopping condos. We made a short sale offer through the listing real estate at the price suggested as fair market value. Six months LATER, Wells Fargo after numerous extraneous requests for information (its a CASH sale, get on with it) declared they were going to foreclose and amazingly within only a month relisted at $25K more than our offer. Its still on the market after the price was lowered $20K. Our successful sale agreement had to be extended twice, our agent admitted he is extending agreements that were scheduled to close August first.

Meanwhile homeowner's associations are struggling to deal with the shortfall, properties are deteriorating, and the bankers continue comphensating themselves lavishly. Seems to me the banks are STILL the 800 lb gorilla in this mess.

[Samiamnh]

There is a good reason....banks are making a FORTUNE on forclosures........go to Youtube and type in "Indymac boys get sweetheart deal".........It explains how the FDIC is paying banks all over the country for the difference between forclosure price and original mortgage.
Watch the video...it is startling.

[nhkev]

Part of the reason is this. Back in 2006 mortgage companies and banks were comprised of sales people. You ever call a business to sign up for business? amazingly your call gets answered by a live peson right away. Call back for customer service later, on hold for ever and a day to talk with live person.

Sales people (especially when commision only) pay for themselves. Service people are a liabililty to the companies profits.

before 2006 the amount of people that were in default was minimal and foreclosures were almost non existant.

When the bust happened the banks laid off huge amounts of workers, and increased their amount of collections but they did little to ramp up their foreclosure depts, then they realized that because of all the buying and selling of mortgage portfolio's they were not staffed to handle the research and steps that needed to be taken for anything close to the amount of foreclosures coming in. How much are the banks going to hire to push them through? a lot less than they need. As far as the shortsales banks hardly ever dealt with them before the bust. It really wasn't until last April that they devised a strategy to handle them. Combine that with some of the problems they have with 2nd mortgages from other companies behind their mortgage, city liens and assessments, and being asked in most cases to accept 60% less than what is owed on the property.

[equalrightsforeveryone]

Originally Posted by 40Flier

I was tempted to respond to the thread "wondering if this is the year?"

We're a week beyond finally closing on a Ft Myers foreclosed condo and wondering why it has to be this crazy? We spent many weeks last winter (and a subsequent trip) shopping condos. We made a short sale offer through the listing real estate at the price suggested as fair market value. Six months LATER, Wells Fargo after numerous extraneous requests for information (its a CASH sale, get on with it) declared they were going to foreclose and amazingly within only a month relisted at $25K more than our offer. Its still on the market after the price was lowered $20K. Our successful sale agreement had to be extended twice, our agent admitted he is extending agreements that were scheduled to close August first.

Meanwhile homeowner's associations are struggling to deal with the shortfall, properties are deteriorating, and the bankers continue comphensating themselves lavishly. Seems to me the banks are STILL the 800 lb gorilla in this mess.

First rule is Never ever make a offer on a short sale, specially if your offer is cash.
Only deal in foreclosures, the short sale are designed only to drag things out so people will make a higher offer.
When buying make your offer DO not let anyone try to talk you in to raising you offer, be very specific in the acceptance portion of you offer, and if they do not accept your terms walk away. hanging in there just ties up your money.
This make it a little harder but you will get what you want in the end.
It took me about 14 months to get the home we bought doing a lot of research on the net.
As the buyer make sure you ,-
1. deal with the listing agent directly, (cut out the middle person).
2. always deal with multiple agents at one time. (never stick with just one, the sellers use multiple agents and so should you as the buyer)
3. when making an offer tell them at the end that, and I mean the end. That you have other offers on the table and who ever accepts your offer first get the money. They are not happy with this but believe me there are so many out there that you will find some body to take your money.

I went true at least 25 agents when I bought my house, just remember you owe them nothing and your paying cash so do what is necessary to get the deal you want, not the deal they want you to get.
It also help to get educated on how to read a contract. you learn what to look for.

[hiknapster]

If you deal with a seller's agent you are dealing with someone that is not protecting your interest, they are protecting the seller's, so BEWARE.

There is more misinformation on this thread, but I am not going to get into a war. Life is too short. I suspect the OP, having been dealing with this issue for awhile, knows most of the ins and outs.

Some of the info on this forum is great, some of it is horrible. You learn to pick through it all, after awhile.

[wellsme]

We were totally against even looking at a short sale until we were told about a "bank approved price" short sale. The home was built in 2007 and never lived in. We had a sellers agent represent us.
We were surprised that the home was basically in move in condition except the fact that it needed a stove, washer, dryer, and some serious landscaping.
We had our offer accepted in 48 hours and the closing 45 days later. It was a fairly routine closing other than a couple of minor glitches with my bank.
I think most people are scared away from short sales when they should be asking for "bank approved price" short sales.

[hiknapster]

Originally Posted by wellsme

I think most people are scared away from short sales when they should be asking for "bank approved price" short sales.

VERY true.

[equalrightsforeveryone]

Originally Posted by wellsme

We were totally against even looking at a short sale until we were told about a "bank approved price" short sale. The home was built in 2007 and never lived in. We had a sellers agent represent us.
We were surprised that the home was basically in move in condition except the fact that it needed a stove, washer, dryer, and some serious landscaping.
We had our offer accepted in 48 hours and the closing 45 days later. It was a fairly routine closing other than a couple of minor glitches with my bank.
I think most people are scared away from short sales when they should be asking for "bank approved price" short sales.

Good for you sometimes folks get luck.
Looks like your one of them. enjoy your new home.

[luvmypackers]

I've been going through a short sale and after three attempts or three times a charm i think i might own a CC home.

[hiknapster]

Originally Posted by luvmypackers

I've been going through a short sale and after three attempts or three times a charm i think i might own a CC home.

Congratulations! I am quite sure you will be very happy!