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We made an offer on a short sale on Jan 11. It was assigned a negotiator, the appraisal was done, and it was getting close to approval. We heard from our agent yesterday that the bank will sell us the house, but for $20k more than our offer. They said the appraisal came in $25k above our offer. Our agent said that we have until 5 pm today (24 hours total) to make our decision and if we decline, the house will go back on the market at the appraised price. The new price will have a payment that will be uncomfortable for us but the agent said there is no negotiating. Is this common with short sales for the bank to up the price at the end? We're in a market that was in Forbes Top 10 Worst Real Estate markets. Almost all houses for sale are short sales (5 in our price range are not). It has made it a nightmare. Is this strong arm tactic with banks common? I will NEVER deal with a short sale again.
Hey TheThreebs, sorry for you situation and no one set pattern for the lenders and different handling by all. Short sales are one of the most misunderstood areas out there, and many agents are not even sure. Did you have an accepted signed contract with your offer? If not, then I would approach your agent with a counter and meet in the middle. Im sure, you probably qualified, and supprising they had it appraised , after your offer. Some lenders dont even know what they are doing, but they dont have to accept until they are pleased. Just because it appraised, does not mean it would be the same with the next one. Your loan officer, will probably not accept there appraisal, and more than likely need a new one. Who knows, it could even come in lower than the first lender. You agent is most likley, not that clear as you can always counter, not that they will take it. So try and make a counter maybe in the middle, and even if they turn it down, you could always come in later with a new offer, if its not sold. Good luck, and keep us posted.
Thanks oldmanbob. We made an offer to the seller on January 11 and went under contract and into escrow at that time. They were not pre-approved through their bank for a short sale of that amount. The bank went through the paper gathering stage and said that our offer would most likely be accepted. It wasn't until they got an appraisal that the price went up. Our agent said if we don't accept by 5 pm today the house will go back on the market tomorrow at the newly appraised price. I know we can't afford the house at the new price and our agent said they will not accept offers from us. So it is take it or leave it, I guess.
Thanks oldmanbob. We made an offer to the seller on January 11 and went under contract and into escrow at that time. They were not pre-approved through their bank for a short sale of that amount. The bank went through the paper gathering stage and said that our offer would most likely be accepted. It wasn't until they got an appraisal that the price went up. Our agent said if we don't accept by 5 pm today the house will go back on the market tomorrow at the newly appraised price. I know we can't afford the house at the new price and our agent said they will not accept offers from us. So it is take it or leave it, I guess.
If you can't afford it don't do it. It's not worth being constantly stressed out over making payments. I know it stinks, but don't make it worse. There are other houses out there.
Yes, the bank can require a price change as a condition of approval. Many short sales are not priced realistically, and the bank will not approve when they check actual market value. One of the many risks of short sales.
I was put in a somewhat similiar decision last year. I got a home for listed for xxx, then it came up an extra 10k. I was very unsure of if I should do it. I decided to go ahead with it. After the inspection, there were several issues and two major safety issues. The one I remember is they put this mickey mouse style exhause fan in the bathroom where the fan was right above the shower on a piece of wood. Say you are taking a shower, earthquake happens, fan falls and I die! They refused to do anything even though it would have to be done. That was my breaking point. I decided to pass on the home. I got lucky a few months later, got a place for much cheaper and with a mullrose. (spelling is off)
I suggest you do not move forward. I know buying a house is a struggle. I looked for almost 18 months but you do not want to be that close to your limit.
Nothing wrong with what the bank did and you can make a counter offer if you want or not...
We had a similar thing and refused to pay more and told the realtor we would back out since the contract was contigent on our offer. The realtor was the new hubby of the owner of the seller..
The seller her self was a real estate lawyer who was specialized in foreclosures and offered the bank to take a judgment so we could close and her offer was taken. So we got the house for our offer price and the bank got what they wanted...the seller got rid of the house before being foreclosed on so 3 parties were happy
Perhaps the seller is willing to do the same thing in order for their credit score not to drop completely and to be off the hook for the mortgage and demand from the bank that they won't go after them in the future.
We made an offer on a short sale on Jan 11. It was assigned a negotiator, the appraisal was done, and it was getting close to approval. We heard from our agent yesterday that the bank will sell us the house, but for $20k more than our offer. They said the appraisal came in $25k above our offer. Our agent said that we have until 5 pm today (24 hours total) to make our decision and if we decline, the house will go back on the market at the appraised price. The new price will have a payment that will be uncomfortable for us but the agent said there is no negotiating. Is this common with short sales for the bank to up the price at the end? We're in a market that was in Forbes Top 10 Worst Real Estate markets. Almost all houses for sale are short sales (5 in our price range are not). It has made it a nightmare. Is this strong arm tactic with banks common? I will NEVER deal with a short sale again.
Tell the bank to go pound sand. Ridiculous!
I just went to a short sale open house of a home in a "better" neighborhood of LA/west LA , asking price is 799K (the current owner bought in 2005 for 1.1 mil, used it only as a rental that has subsequently dropped rent from $6K to the current $3K, at the same time was trying to sell it starting at 1.6 mil after putting nothing into it...then dropped the asking price over the past few years to 1.55, 1.5, 1.4, 1.3, 1.25, 1.2, 1.1, then finally took it off the market last year).
The home has all sorts of issues. Needs a completely new kitchen (it's not just old...the pantry has missing doors and shelves, it's small ancient and an odd layout), new cabinets, bathrooms need to be updated, some structural changes, the garage is structurally unsafe and in very real danger of collapsing etc. I emailed the listing agent based on the various issues, not to mention a busy street and a bank owned comp 3 houses up the street that sold last year for 550K (the previous owner took the entire kitchen fixtures and bathroom fixtures, marble, granite etc. with him/her)...I would offer 500K.
Her response, which just made me laugh:
Thanks for your preliminary offer. I don't know if {My Assistant} told you but we are in multiple counter's well over the asking price. I know for a fact that the bank would not consider anything in the 500k range. Please let us know if we can assist you in your search. We can create an autonotification search specific to your needs.
Have a great day.
We made an offer on a short sale on Jan 11. It was assigned a negotiator, the appraisal was done, and it was getting close to approval. We heard from our agent yesterday that the bank will sell us the house, but for $20k more than our offer. They said the appraisal came in $25k above our offer. Our agent said that we have until 5 pm today (24 hours total) to make our decision and if we decline, the house will go back on the market at the appraised price. The new price will have a payment that will be uncomfortable for us but the agent said there is no negotiating. Is this common with short sales for the bank to up the price at the end? We're in a market that was in Forbes Top 10 Worst Real Estate markets. Almost all houses for sale are short sales (5 in our price range are not). It has made it a nightmare. Is this strong arm tactic with banks common? I will NEVER deal with a short sale again.
This is your chance to walk away and having learned a lesson not to deal with banks and/or their agents and negotiators. Banks never had the foresight to lend money to responsible buyers when money was plentiful. Just lend it and collect the interest was their motto. Now they are trying to recoop their losses any way possible.
If you really want the house, there is no law that says that you can not stand by your original offer. You could communicate that to your 'agent' or the bank directly.
If you do decide to go ahead with the deal, (and it will most likely be accepted) be sure to hire a real estate attorney to do the closing.
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