Residential Real Estate Broker · Atlanta, GA · Member since 2008 · 13 posts · 0 votes
My brother and I made a SS offer on a property that is listed with a real estate agent that has SS experience. Supposedly, the seller and listing agent have been working the SS for a few months...the property was previously under contract with another buyer that backed out due to time constraints. The agent has supposedly recieved a verbal SS price from the bank, but no written acceptance. The seller has a 100% loan with no equity, so the bank will take a beating. We have not deposited any earnest money nor conducted any inspections, so we have zero dollars in the deal.
Today, I learn that the property has a July 1 auction date. What should we do at this point?
-Cool our heels and see if the bank approves the SS before the auction?
-Contact the attorney handling the foreclosure and try to get a deal?
-Contact the bank directly (local bank) and try to get a deal?
From my experience, it is pretty easy to get the bank to postpone the auction sale. This doesn't mean it's easy to get the bank to take your offer, but they are usually fairly quick to postpone the auction.
It is normal for the bank to take six weeks to make a decision.
Here are a few questions to ask yourself though:
1. Why are you interested in this property?
2. What do you think is fair market value?
3. What do you think you can get it for?
4. What is your exit strategy?
If you want the property, ask your agent these questions:
Has the seller submitted:
1. Their financial worksheet
2. hardship letter
3. tax returns
4. bank statements
5. pay stubs
These are the minimum documents required to get the bank thinking short sale. If the answer is "ummmmm"....then walk away.
From my experience, it is pretty easy to get the bank to postpone the auction sale. This doesn't mean it's easy to get the bank to take your offer, but they are usually fairly quick to postpone the auction.
Agreed. Usually the servicer still sets a foreclosure sale date so that in case you back out, they will not have to go through the motions again. They will usually just put a hold on the sale until the short sale goes through.
From reading this the main idea that comes to mind is you needed to contact the lender and make sure that they are doing what they are supposed to. ]]
We follow up almost daily on some of our account and we had a file that was sitting, that's right, sitting on someones desk. We kept calling and they kept stalling. Said they needed, this, that and the other think and everything was provided directly upon request. We still got to the sale date. If you do not speak to the right people the home your working on could go to sale. We were able to stop ours last minute but it is really important to stay on top of the bank.
You mentioned that the bank provided a verbal SS price...was that a verbal acceptance to your SS offer or a verbal counter offer?
I just had a bank tell me that they accepted my offer and were going to postpone the auction. They ended up not postponing the auction and it went to trustee sale anyways....very disappointing but what can ya do.
If you have authorization from the seller then I would recommend contacting the bank directly. Postponements are pretty common in these situations especially if the property is listed on the market and there has been action...even more so when offers have been submitted.
Don't back off...keep in constact contact with the bank. They don't have the brightest bulbs handling these files and are notorious for letting things fall through the cracks and letting them go to auction.
Verbal anything is worthless even if it is from a bank. If you want to postphone a sale. Dispute the debt request in writing original documentation of the debt. Many of these loans have been sold so many times no one knows where the doc's are. Even if they do have them it will buy you as much time as it takes them to provide you with them. The bank will always give you the run around I've faxed the same documetation 5 or 6 times to the loss mitigation department and they always say they don't have it. You have to keep records of day, time and who you talked to as well as the number you faxed to and have them on hand every time you call.
What are you doing to protect the homeowner from a deficiancy judgement. You do know they can be 1099ed on the lost equity from the bank and taxed on the difference as if it where a profit.
Short sale approvals seem to be getting more and more difficult, for no reason. We have one cash deal for $1.6M with a $1.2M appraisal by Countrywide. We a full time attorney on it now, and have forced it to upper executive level approval three times, and each time it has been denied for no given reason. Roadblocks and lies at every step, even though you would think it would be easy money for Countrywide, as if it goes to foreclosure, they will get likely 40% less.
And seconds are a whole other problem these days.
I am very careful about even recommending a client sign on to a short sale, especially with the REO opportunities now.
Here in Bexar county Texas I've been seeing that they not only are neotiating on far less homes. The lenders are actually bidding on the properties at the auction. Where we where getting 30-50% discounts now where lucky to get 15-20% off. Seems to me they know something we don't. I'm thinking bailout!