[SoFLGal]

I didn't read through the entire thread so I'm not sure how much of this has been covered but here's how the process goes:

The agent puts the home on the market (usually at an extremely low price)
to lure in some offers. Basically, using the offers as bait for the bank,
knowing damn well there's no way the bank would come close to accepting the listing price. The listing agent has no idea what the bank will take until they come back with a counter.

Once they get an offer on the home it takes months, and months to hear anything back. Then they send a real estate agent out to do a BPO (brokers price opinion). This agent cannot be connected with the sale in any way. The agent goes out and looks at the home, usually pricing it at or above market value (depending on who the agent is that appraises it). They really don't care if it sells because it's not money in their pocket. They only get paid a flat fee for doing the BPO for the bank, usually around $150. BPO's can vary wildly depending on the homes they choose for comparables.

Remember the bank never actually sees the property and just uses the BPO from the agent. Basically the whole deal hinges on what the BPO comes back at.

Ok, now on the numerous problems with short sales. Like I stated above the
banks often take months to answer bank. The listing price is usually just
bait to lure people into making an offer so the agent knows where the bank
stands, most of the time the bank will not accept the listing price and it
goes for more money. Generally, banks are not willing to negotiate on short sales and
they don't care if you walk away or not.

We have a short sale that we have been waiting for an answer from the
bank since August the offer is full price on the listing price that wasn't
lowered just to reel in an offer. The buyers agent says that her people are
ready to walk because we cannot get an answer from the bank. The bank
said they really don't care if they walk, "the offer has to follow the proper
channels". 95% of all short sales fall through for this reason and the
other reasons I stated.

We have another home that has been listed by various agents for two years. We have had six offers and all six have walked because most have waited 3-5 months for an
answer. When we did get an answer back from the bank it was a ridiculous
counter price and they were not willing to negotiate. When the bank
answers bank it's not what the buyers were expecting to hear. As you can see the
foreclosure process often takes a very long time.

Now a foreclosed property is a whole different thing. If the bank actually
owns the property you can get some pretty good deals. They usually answer
bank with in one to two days and often take much, much less than the
asking price. There are usually a handful of agents in each town that have the
contracts to deal with the banks (foreclosed) property.

To answer your question about does the time frame and price seem realistic to you? No it doesn't. Short sales take a minimum of several months.

So this is pretty much how they work in a nutshell. I would say that you definitely need a Realtor that is experienced in dealing with short sales.

[jbravo]

Originally Posted by SoFLGal

I didn't read through the entire thread so I'm not sure how much of this has been covered but here's how the process goes:

The agent puts the home on the market (usually at an extremely low price)
to lure in some offers. Basically, using the offers as bait for the bank,
knowing damn well there's no way the bank would come close to accepting the listing price. The listing agent has no idea what the bank will take until they come back with a counter.

Once they get an offer on the home it takes months, and months to hear anything back. Then they send a real estate agent out to do a BPO (brokers price opinion). This agent cannot be connected with the sale in any way. The agent goes out and looks at the home, usually pricing it at or above market value (depending on who the agent is that appraises it). They really don't care if it sells because it's not money in their pocket. They only get paid a flat fee for doing the BPO for the bank, usually around $150. BPO's can vary wildly depending on the homes they choose for comparables.

Remember the bank never actually sees the property and just uses the BPO from the agent. Basically the whole deal hinges on what the BPO comes back at.

Ok, now on the numerous problems with short sales. Like I stated above the
banks often take months to answer bank. The listing price is usually just
bait to lure people into making an offer so the agent knows where the bank
stands, most of the time the bank will not accept the listing price and it
goes for more money. Generally, banks are not willing to negotiate on short sales and
they don't care if you walk away or not.

We have a short sale that we have been waiting for an answer from the
bank since August the offer is full price on the listing price that wasn't
lowered just to reel in an offer. The buyers agent says that her people are
ready to walk because we cannot get an answer from the bank. The bank
said they really don't care if they walk, "the offer has to follow the proper
channels". 95% of all short sales fall through for this reason and the
other reasons I stated.

We have another home that has been listed by various agents for two years. We have had six offers and all six have walked because most have waited 3-5 months for an
answer. When we did get an answer back from the bank it was a ridiculous
counter price and they were not willing to negotiate. When the bank
answers bank it's not what the buyers were expecting to hear. As you can see the
foreclosure process often takes a very long time.

Now a foreclosed property is a whole different thing. If the bank actually
owns the property you can get some pretty good deals. They usually answer
bank with in one to two days and often take much, much less than the
asking price. There are usually a handful of agents in each town that have the
contracts to deal with the banks (foreclosed) property.

To answer your question about does the time frame and price seem realistic to you? No it doesn't. Short sales take a minimum of several months.

So this is pretty much how they work in a nutshell. I would say that you definitely need a Realtor that is experienced in dealing with short sales.

Good post, positive rep point. I must be getting soft on real estate agents/brokers. Usually not my favorite group.
Banks are not willing to negotiate on a short sale until AFTER the homeowner is behind at least a couple of months.
I wonder how many homeowners (sellers) know that the IRS will tax them on the short sale?
The final irony!

[kyomonster]

You do need your own agent when dealing with the banks. Also I did a shortsale with Homecomings, and you have to watch out for them. This was in 03 that we did a short sale, and they ripped us off. They uped the price to the buyers, and told them that the only amount they would accept was the listing amount that was more then what we owed.

Originally Posted by katerina

Could anyone help me?

A week ago we put an offer fort short sale with Homecoming Financial Network through listing agent. The official asking price was 350 kk and our bid 325 kk (house is listed for 200 days with no offer yet). Approx. price of the house is around 450 kk. The owner took two mortgages, first for 620 kk (full selling price) and second for 90 kk - both with above said bank. Today our agent called and said someone else offered same amount as we did but cash and to get the house, we have to increase our offer. So we did, by phone - 350 kk. Couple hrs ago, agent called to tell us it looks good and we shall hear the answer soon. By studying I learned that banks usually accept no less than 90% of the real house value and the procedure takes much more than couple hours. I also learned about cases when listing price is not the actual price asked by bank. Could this be our case? Does all of this looks realistic to you?

Thanks for your comments.

[momix5]

My cousin did a short sale it can take 4 months to get an answer.

[jim-k]

Originally Posted by katerina

Could anyone help me?

A week ago we put an offer fort short sale with Homecoming Financial Network through listing agent. The official asking price was 350 kk and our bid 325 kk (house is listed for 200 days with no offer yet). Approx. price of the house is around 450 kk. The owner took two mortgages, first for 620 kk (full selling price) and second for 90 kk - both with above said bank. Today our agent called and said someone else offered same amount as we did but cash and to get the house, we have to increase our offer. So we did, by phone - 350 kk. Couple hrs ago, agent called to tell us it looks good and we shall hear the answer soon. By studying I learned that banks usually accept no less than 90% of the real house value and the procedure takes much more than couple hours. I also learned about cases when listing price is not the actual price asked by bank. Could this be our case? Does all of this looks realistic to you?

Thanks for your comments.

If it helps, I just finished negotiating a short sale with Homecomings on a salt water canal front property here in Florida.

Took them about a week to have a BPO done, once they had my offer in hand, I was able to negotiate the price with them over the phone. I had a best and final offer in mind and in less than 10 minutes (really) was able to work the deal with my broker. The seller owed $404K, the house assessed at $490. I originally offered $325 and after a few counters, settled at $365K. Closing is scheduled for May 5th and I just got this started less than two weeks ago. Guess I should consider myself lucky, but did lots of prep work to insure things went smoothly, including lot's of research on the seller to make sure there were no liens. Got inspections scheduled for next week - hope all goes well. Be persisitant, and have a bottom line price in hand and stick to it. Appears to me as thought they are in a hurry to get the backlog down. I was dealing with a bean counter in Dallas, far removed from the property.........Jim

[cfIfan]

Well, if you dont already have your own realtor who is seperate to the sellign agent, you should have one. They are there to look after your interestes, not the sellers, but make sure you get someone who is very experienced in short sales because it is a mine field.

I have to say i have dealt with a few short sales recently, and i have never heard of the bank coming back so quickly, however, if you have an agent talk to them and see what they say.

You will hear people slamming realtors on here, and i will tell you from my personal experience i hate short sales as they are long, and drawn out, and sometimes you miss some great deals because of all the messing about. But i would never attempt buying a property on short sale without a realtor, because we know what we are doing and can steer you clear of all the pitfalls. Something, someone who just slams realtors on here cant do.

[jbravo]

Originally Posted by jim-k

If it helps, I just finished negotiating a short sale with Homecomings on a salt water canal front property here in Florida.

Took them about a week to have a BPO done, once they had my offer in hand, I was able to negotiate the price with them over the phone. Got inspections scheduled for next week - hope all goes well.

The bank negotiated and agreed to an offer based on contingencies?!!! (inspection)

Originally Posted by cfIfan

...I have to say i have dealt with a few short sales recently, and i have never heard of the bank coming back so quickly...
You will hear people slamming realtors on here, and i will tell you from my personal experience i hate short sales as they are long, and drawn out ... i would never attempt buying a property on short sale without a realtor, because we know what we are doing and can steer you clear of all the pitfalls. Something, someone who just slams realtors on here cant do.

Got to agree with most of CfIan's post here.
Never heard of a short sale approved in 2 weeks (and with contingencies!??)
Disagree on "we know what we are doing" part. SOME ethical, intelligent brokers/salespersons know what they are doing.
Some RE attorneys may also know. (which on a short sale I would use no matter what)
Due diligence is finding the right person.
Unless you find one of these you may be saving a penny and losing your dollars.

_

[cfIfan]

Your right, i should have clarrified what i meant. But to be honest, there are so many realtors out there, people really should be interviewing realtors just to make sure they dont get a bad one, as i have said before there are alot of bad ones out there which give us good ones a bad name.

Now i have to move on and ask what the heck is going on. You have been agreeing with me quite a bit lately JBRAVO.....lol

dont worry i wont tell anyone...;-)

[jbravo]

Originally Posted by cfIfan

Your right, i should have clarrified what i meant. But to be honest, there are so many realtors out there, people really should be interviewing realtors just to make sure they dont get a bad one, as i have said before there are alot of bad ones out there which give us good ones a bad name.

Now i have to move on and ask what the heck is going on. You have been agreeing with me quite a bit lately JBRAVO.....lol

dont worry i wont tell anyone...;-)

Actually, I do agree with a LOT of what you say.
And, this is important, I have always respected what a agent with access to the MLS brings to the table. I have happily paid 3% to a buyers' agent when I was representing myself.
My only disagreement is a BIG one. That's when you hint at the "buy now... now is a great time to buy! ..."
For many, and I mean many, this is a great time to RENT. (They will save many thousands doing so.)
All indicators point to a further unwinding of the market for many months.
When you begin to sound like Yun ( although he has been a LITTLE more truthful lately) or the previous NAR economist Davis diarrhea "The medium price for a new home in Sarasota will be over one million dollars," it drives me nuts!
Really, it does.

I think you are probably a professional. I can and do respect that; however that does not mean that you do not belong to a profession.
My hairstylist needed 800-1100 hours of classroom training and a full one day exam.
I got my license after 80 hours and took an exam that I scored 97% (half my class did not make the passing grade of 70%, true story)
Continuing education was a joke, I even took my broker's (my boss) mail-in exam for him (broker.)
You, know the average IQ in the office.
If the general public knew the state of affairs in a RE office, 6% commission would be history.
By the by, as I said before, I am not a member of NAR and I am currently not an agent, in fact, I never sold a house as an agent.

RE desperately needs professionals and I hope you are one.
If you could just open yourself to the possibility that prices are still way out of whack with rental income and with wages, you would be an even better agent.
Without sounding arrogant, I can e-mail you links from the FED in 1999 and 2002 (yes, 1999 and 2002!) when they thought a bubble was already in place. Tons of historical charts of the relationship of rent income to prices.
I mean, why would an investor pay good money for a NEGATIVE return unless he/she was speculating?! Yet, that was the modus operandi in SF since 1999-2001, wasn't it?

Maybe, others and myself do know something about RE and are not Realtors.

_

[cfIfan]

I think you need to understand that when i say buy now, that is an opinion i have based on several factors i see myself. But you are right, in this country it is very easy to become a realtor, i was amazed at how easy it was.

As i think i told you before i am originally from the UK. When i was there at university i studied law, in my final year i went to work in a firm and absolutly hated it with a passion(im afraid i feel about attorneys the way most feel about realtors....lol). So i completed my degree then went on to train to be a real estate agent in the UK which is alot harder than here. I trained full time for 2 years and then went into the industry in the UK on a part time basis because i was going into the family business. So although i may be trained here in the US on the usual short course, i do actually have training in both law and real estate which i believe holds me in good stead.

I think the home buying public are actually very well informed, and many come to resources like this to enhance their knowledge, and to be honest, our passion for our points of view can only help them in making their own decision.

I agree with you emphatically, that there are some realtors who are unrealistic when it comes to median prices, and i believe it is because they just look at what the mls tells them and dont do any research of their own.

I specialize in Winter Garden/Windermere/Davenport/Celebration. Whilst Celebration will always be overpriced because of what it is(and although ive lived there and loved it, i dont think it is worth it realistically and the taxes are extortionate), other areas if you look at the mls the median prices are still way off. And i do agree with you. The problem is because the inventory level is so high, there are alot of properties that are realistically priced for the current market, and when going through them they are staying on the market for no more than 50 days because they are so well priced. The problem is because of the high inventory and these properties not staying long on the market the median price isnt reflected because there are so many over priced homes. I think in my areas that i specialize in that prices will fall further, but only to what the aggressively priced homes are at. But then remember, areas like Winter Garden/Windermere are different beasts to Davenport. Davenport homes will always be valued lower just because of the area and that it is a short term rental area. Is every area the same? No.

Listening to you talk, i do believe we agree on many issues. I dont know if you ever read that CNN money report i posted which supported on the whole buying now. It shocked the hell out of me, simply because it made the same points i had been making for ages, and for the first time i had seen they had actually used median wages in their analysis. But what shocked me the most was i think it was you or someone else had posted an article by the same source saying dont buy for 2-3 years, and i was just amazed that they had made a complete u turn in their analysis.

You are right though when you say there are alot of bad realtors out there. Do i like it? No because it gives people an impression we are all bad, but then i cant blame you for that but the bad realtors who give people reasons to believe this. I just hope that people will read what i write and look at all the sources both for my point of view and against and weigh the options for their own particular situation. For some sections of society renting is the best thing for them, but others it isnt, and in my particular area, i wouldnt recommend renting when there are such good deals out there if you get a realtor who isnt afraid of hardwork and prepared to find them.

I have a client who was thinking of renting a townhome over here in Winter Garden, for $1350 per month for a 2/2 1200 sq ft. I sourced them a townhome in pre foreclosure 3/2 1400sq ft for $160,000 in the same subdivision as they wanted to rent. At this price their mortgage and escrows and HOA would only put them around $50 over renting, so in their situation buying was better. And it is a misconception that it is hard to get a mortgage now. It isnt. It is hard if you have bad credit history, and are high risk. And in this circumstance i would recommend renting until you get yourselves straight. The good times are over and its time to come back down to reality in terms that no longer is the criteria a pulse to qualify for a mortgage as it has been for along time.

But i do appreciate your comments JBRAVO, even if i dont agree with some aspects, still we will agree to disagree......lol ill buy you a drink sometime to show there is no hard feelings...;-)