Property listed as a short sale on the market for 500+ days. HOW is this possible?

[equalrightsforeveryone]

Originally Posted by monikac21

short sales are a buyer's, seller's and realtor's nightmare. In a short sale situation the seller owes more on the property than the current market value. This is an unfortunate situation since some sellers can not make the mortgage payments anymore but they can not sell the property either without bringing money to close. Of course the seller can not do that either. Now the banks might allow the seller to short sale - that means theoretically the bank might probably take the loss and the seller can "walk" from the property. However it sounds better than it is. Some banks hit their sellers with a note for the difference - some won't. But regardless, the banks really don't want the loss and for sure they don't want to show the loss in their books. As long as the property is still in a short sale situation, they don't show the loss, the minute it is closed the bank has to show the loss they made.

Banks are stretching and stretching and stretching (sometimes I think they want the buyer to walk, so they can/have to start the short sale all over again and gain additional time.)



And yes it can take several month until the seller's bank either accepts or counters a short sale offer, counters or declines it. And all the time the buyer is hoping that they finally get the short sale approval. Sometimes the seller's lender will foreclose on the property in the meantime, totally ignoring the short sale offer on the table. In that case the buyer is out. Sometimes it even happens that the seller's bank gives the short sale approval with a closing date and goes ahead and forecloses on the property between the short sale approval and closing date - in this situation the buyer is out as well.

The crazy thing is that sometimes we have a short sale cash offer on the table, the bank lets everyone go through all steps and paperwork and documents to support the short sale, then declines the short sale offer and forecloses on the property and they get way less money with the foreclosure sale than they would have gotten if they would have accepted the original short sale offer. Makes no sense at all - unless the property had PMI insurance and PMI paid the difference in the bank foreclosure but would not have paid in the short sale situation - however that does not make sense either.

My current situation:

Short Sale 1: Had cash offer on a house at a golf course in Cape Coral, which I had as a short sale. Offer price was $ 320,000 cash. Bank declined offer and sold property in bank foreclosure for $ 160,000 about 1 year later.

Short Sale 2: Had cash offer on a short sale house in NE Cape Coral, bank approved the offer for $ 60,000 and set closing date, between approval and closing date bank foreclosed on property, then appologized and rescinded the foreclosure, asked us to resubmit everything again, we get another short sale approval, same thing happens again, property was sold in foreclosure, bank appologized and rescinded foreclosure, now we are at the third go around, working on this property since 05/2010.

short sale 3: Have offer on there since 10/10 will close it tomorrow. (Hopefully)

Some banks are easier to deal with than others but every short sale requires a lot of patients from everybody involved. What makes a short sale so difficult is that nobody really knows (for month) if the seller's bank will accept the offer or not and all the time everyone is just hanging in the air - not knowing what is going to happen.

You have made a excellent point to staying away from short sales.

Hope you get the home you want.

[monikac21]

Originally Posted by equalrightsforeveryone

You have made a excellent point to staying away from short sales.

Hope you get the home you want.

The whole posting (prior) was short sales out of my experience. I am a Realtor on Cape Coral. The three cases I mentioned are current short sales I am involved with for clients.

Anyway we closed on "Short sale 3" today and my clients are very happy - they got a great house to a great price.

short Sale 2 is still hanging in the air and short sale 1 is lost.

I think everyone has to make their own decision if they want to "dig around" with a short sale and probably loose out on other homes on the market - or if they want to stay away from short sales all together.

[Iamrita]

Originally Posted by CTC

I just made an offer on a short sale. I was told not to put any money down until the bank approved the price. I don't have any money tied up. But the property has been taken off the market. This says to me that the bank is not trying to get multiple offers as to raise the price-the property is actually being listed for slightly above the 2010 appraised value. Still worth it to us because of the nice pool and very good setting.

We found a property we really liked, and which was well taken care of unlike many foreclosures I looked at.

Like my agent said, all short sales are different, but she has had good luck getting them through. I think it is important to find a patient agent who has experience with short sales. One agent told me point blank that he won't deal with short sales, so I found another agent. Just as it might take months to get the property, it will take months for the agent to get their money.

The owners in our situation are motivated because their court date is in July-and they have been working with their bank for a while on this (first attempt on their side fell through after the buyer backed out).

Will know in a couple of months I reckon. We are in no hurry, but are feeling optimistic.

I hope it works out for you. The fact that you are not urgent is a good thing. I also think flexibility is an asset. IMO there are good opportunities out there and understanding the process along with an ability to accurately assess the situation will work in your favor.

We had a very positive experience with a short sale and from what I've read and heard from others I would say it largely depends upon " the players" involved. In our situation, the listing agent had done many short sales and the seller had retained a prominent "short sale" attorney. Our agent knew both of them, had experience with short sales and told us it was a best case scenario. That turned out to be accurate, the sale took 14 weeks from offer to closing and we had nice equity based on independent appraisals. Good luck!

[tomj38]

I do feel it is worthwhile to look at short sales if you have the flexibility. I just had a short sales close within 3 weeks from offer. I do feel that you need to evaluate the short sale situation as it were a room in the house. I skipped a property that was the same price as mine which had more land and more upside because it had just listed as a short and the list price was 20% of what the bank owed. That was a deal that was going to take forever and probably not get approved. I went with a property that was more likely to be closable.

[CCRESI]

Congrats Tom!!!! That's awesome. Some short sales are moving quicker than others, glad you had a successful sale