Looking for advice

We have been trying to sell our home for almost three years. We finally decided to cut our losses and have a buyer offering approximately 85K less than we owe. Our loan originated with Countrywide and is now with Bank of America.

We have all the short-sale paperwork on our end ready to go: hardship letter, income statements, taxes, etc.

I am looking for advice on this offer. Our mortgage balance (we only have a 1st) is 304K. should we negotiate with the buyer before presenting to the bank (they say there is wiggle room) or is that totally up to the bank???

also - should we hire a lawyer to help with negotiations? our real estate agent doesn't have much short sale experience, though no local agent seems to have much knowledge.

we call the bank weekly as we are now 60+ days behind on payments and they have assigned us to a short sale negotiator. . . problem is the phone cuts off every time we try to call them.

Any advice would be appreciated. These are serious buyers and we want to expedite this deal.

Edited: 06/26/2010 at 11:34AM

Dave Grosse

Real Estate Investor · Lebanon, Illinois

151 posts
1102 Influence
4 Awards

Icon_minipost Feb 09 '10, 01:59 AM

Hi Jonathon - the negotiation of price is between the bank and your buyer if it will be a short sale. Unless you have an FHA loan, you will not receive any proceeds form the sale of the property(not legally anyway).

the phone cuts out every time you try to call the negotiator directly or just BOA in general? that's kind of weird.

Find out from BOA who the investor is - if it is Fannie Mae, Freedie Mac, or Ginnie Mae, they will generally only accept an offer that is in the neighborhood of 86% of the BPO value. If it is someone else., then its anyone's guess what they will accept for the offer. What does your realtor think the value is?

Where are you located? and does your buyer have their own agent or did your agent bring them in? there are a few people here on BP that do negotiations - hopefully they will chime in. I don't think I would go to the expense of hiring a lawyer to handle the negotiations just yet. Have the buyers presented their offer to BOA yet?

Edited: 06/26/2010 at 11:34AM

Jonathan Sparks

2 posts
13 Influence

Icon_minipost Feb 09 '10, 02:17 AM

We do have an FHA loan. What does that mean???

When we call the short sale department, we are put on hold (after entering our loan #) and then it goes to a fast busy signal as if someone picked up and immediately hung up. We have tried several different times over the past week to call in and have gotten nowhere.

The buyer is an agent himself, so our agent is just representing us.

We are about 30 miles west of Raleigh.

Our home is supposedly worth around 300K but it's been on the market for 3 years and had NO offers until now. The offer we have is for more like 75% of the value. . .

We have the offer in house with our agent and she has not yet submitted it to BofA. We weren't sure if we should submit such a low-ball offer.

All we care about is getting out from under the mortgage and moving on, ideally with no danger of being sued for the deficiency. NC is a deed of trust state - does that make us safe or no?

Thanks for any and all info as we are just beginning what is going to be a lengthy process.

Edited: 06/26/2010 at 11:34AM

Justin S.

Rehabber · Chandler, Arizona

1162 posts
12272 Influence
14 Awards

Icon_minipost Feb 09 '10, 02:57 AM

Jon-

Bank of america is very slow and painful to deal with so prepare youself for a long ride. Since you loan is an FHA loan, the bank will come and appraise the value of the property. They may decide to take less appraised amount but in most cases, they will try to get that amount.

The value of house seems to be much less than $300K since its been on the market for so long.

The buyer/agents low ball offer is consistent with an investor and is probably wanting the bank to counter him/her. Its pretty common and will kick start your short sale process. The buyer may walk if they do not get it at that price, but at least you'll know what can sell for it once the appraisel is done.

On your question of deficiency judgements, you really should speak with a lawyer about this. The rules vary state to state, and the bank will try and do their best to reserve the right come after you. I'm not saying they will, but they will want to keep their options open. You need to get it in writing and make your contract contigent on the bank waiving all deficiences. Your lawyer can give you the correct verbiage.

Edited: 06/26/2010 at 11:34AM

Justin S., Wheelhouse Properties
E-Mail: wheelhouseproperties@gmail.com
Telephone: 4806780446
Website: http://www.wheelhouseproperties.com
Realtor, Re-modeler, Cash Buyer

Dave Grosse

Real Estate Investor · Lebanon, Illinois

151 posts
1102 Influence
4 Awards

Icon_minipost Feb 09 '10, 03:13 AM

Try this # for BOA - 866-880-1232. I don't have any problems getting through with this one.

Since you have an FHA loan you will be allowed to receive $1000 at closing. And since it is an FHA loan you can expect the bank to take NO LESS than 84% of whatever their appraised value comes in at.

As an investor, when I make an offer on a property, I also do the negotiating with the bank. You may want to ask the buyer of he knows what he is doing, or if this is the first time he has tried to purchase a short sale. If he has experience, then he should be able to handle the bank on his own, or with the help of a professional negotiator.

I agree 100% with everything Justin said - and want to repeat - Talk with an attorney about your deficiency judgment and potential tax liability. There's absolutely great people with very accurate and insightful advice here, but you must protect yourself by speaking with an attorney in your state.

Hope we are helping

Edited: 06/26/2010 at 11:34AM