We just got approval the purchase another short sale, and this will most likely end up being House #37…
The reason for the house name is that we’ve had an interesting short sale situation with this house. Remember, a short sale is when the seller/homeowner asks their lender to allow them to sell the house for less than what is owed on the mortgage; the lender then (usually) forgives the rest of the mortgage debt in order to not have to foreclose on the property. Sometimes, the lender offers the seller a small amount as an incentive to actually go through with the deal and to help with moving expenses.
Well, in this case, when the lender approved the short sale at our offer price, they offered the seller $20,000 to move! This was without the seller or the agent even asking. Considering the sale price of the house is only $95,000, the lender voluntarily offered up more than 20% of their proceeds to give right back to the seller who hadn’t paid their mortgage in more than a year and was defaulting on their loan.
On top of this, the sellers started to have second thoughts about moving! They don’t want to have to pack and find a new place and were actually considering turning down the deal, which would have meant that they’d lose the $20,000 incentive and then probably get foreclosed on in a month or two anyway. Luckily, their agent was able to talk some sense into them, and (HOPEFULLY) they’ll be willing to move by the closing date, which is next Friday.
I’ll post more about this house next week if it turns out that the sellers actually decide to go through with the sale… 🙂
JS,
How long does you “average” short sale take from first offer to closing?
WTF is aptly named… wow.
Mr Window,
Of the 4 short sales we will have purchased (including this one), our average time from offer to purchase closing has been 63 days (66, 35, 85 and 65 days). That said, we have another one where we just got word a couple days ago that we are close to a bank approval — on that one, the offer was submitted almost 5 months ago (about 150 days).
Of course, this is just those that have closed…we’ve had plenty where we never come to agreement with the bank, and sometimes the negotiation process was several months before one side or the other gives up.
Talk about instant equity… Maybe you should name-drop the bank so I know who to get my next mortgage through. 🙂
WOW… my jaw just dropped hearing what the banks are doing these days… the name is indeed right on!
WTF indeed!
So, this was listed on the mls as a potential short sale, or did you market for it?
Best,
Jeff
Eric –
Sadly, this was Chase…
Hey Jeff –
This was listed on the MLS for about a year…the price finally dropped to something we thought was reasonable, and that’s when we went after it.
When we were looking a houses to buy ( foreclosures), we looked at some short sales. The real estate guy ( my friend Joe) told us that it was a crap shot on these houses. Some times is depends on how well the bank has done in that quarter and how much profit or lose they want to show.
Hey Jason –
In my experience, it really all depends on how good the listing agent is. If the listing agent does a good job of convincing the bank that the offer is the best they’re going to get, and also convince them that the offer is reasonable (by ensuring the BPO is consistent with the offer), things tend to go smoothly. Agents have a lot of ability to impact the flow of a short sale and the good ones can get the job done more times than not.
Unfortunately, most agents don’t do that stuff — they just submit the offer to the bank and sit back and wait. Then these same agents complain that it’s “just a crapshoot.” For them, it is.
This is why it’s always better in control of the listing as well as the buying…