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Replies (14)
- John Parlatore, "john.parlatore"
- Contributions:158
This scenario is becoming more and more common. First of all, was the property an approved short sale? If so, the price of $499k is the price that the bank has agreed to based on a net sheet showing exactly what the bank will take away at that price. The comission needs to be accounted for in the listing agent's dealings with the bank (net sheet) If the property was not an approved short sale, but advertised as a short sale, all that means is that at the current price ($499k) that would be a short sale subject to the bank's approval. Finally, if you have submitted an offer, through the listing broker, she will have procuring cause (a series of events producing the sale of a property) if the offer is accepted. If the offer is refused, you have the option to hire a buyer's agent to work for you, and start the process again. I hope this is helpful, I am in the middle of one myself on the listing side. Give me a call if you have any questions, and good luck.
--John
--John
- Christy Alferes, "ChristyAlferes"
- Contributions:93
Ok, let me see if I can answer your question first, and second go over some items I am confused about.
BUYERS AGENT: I wish you had signed on with a buyer's agent - this will usually cost you nothing (or very little) and is well worth it when buying via a "short sale". It sounds like may have already lost your chance of bringing in a buyer's agent in a way that the agent could be compensated through the sale. The listing agent has "procured" you as a buyer and may not be willing to split a commision. You may be able to hire your own agent and compensate them yourself - I still think it would be worth it to have someone on your side.
PRICE: The price you offer is the price you should pay. You should have comparable information on homes in the area to determine selling price. This has NOTHING to do with the asking price or price an agent has given you. A short sale property can be listed at either the banks accepted short fall amount or market value. The agent may have told you 300K because that amount has already already been approved by the bank. Again, there is alot going on here - get your questions answered by a buyers agent or if you must, tell the selling agent to break this down for you so that you understand.
Either way, as long as you plan to stay in this home for at least 7 years, you should be ok and will build up some equity at these prices!
If this is helpful, give me a "thumbs up" if you have more questions, please elaborate.
Good luck!
BUYERS AGENT: I wish you had signed on with a buyer's agent - this will usually cost you nothing (or very little) and is well worth it when buying via a "short sale". It sounds like may have already lost your chance of bringing in a buyer's agent in a way that the agent could be compensated through the sale. The listing agent has "procured" you as a buyer and may not be willing to split a commision. You may be able to hire your own agent and compensate them yourself - I still think it would be worth it to have someone on your side.
PRICE: The price you offer is the price you should pay. You should have comparable information on homes in the area to determine selling price. This has NOTHING to do with the asking price or price an agent has given you. A short sale property can be listed at either the banks accepted short fall amount or market value. The agent may have told you 300K because that amount has already already been approved by the bank. Again, there is alot going on here - get your questions answered by a buyers agent or if you must, tell the selling agent to break this down for you so that you understand.
Either way, as long as you plan to stay in this home for at least 7 years, you should be ok and will build up some equity at these prices!
If this is helpful, give me a "thumbs up" if you have more questions, please elaborate.
Good luck!
- Christy Alferes, "ChristyAlferes"
- Contributions:93
John, I think you gave the better answer on this one!
- Guy Ghanem
- Contributions:68
Only thing I can add to this is time frame. When do you plan to move? Do you have children that need to be transferred from schools? Is this a job relocation from another city? Is your current living situation flexible, or do you need to move right away?
Unfortunately, one of the biggest draw backs to short sales is the time it takes the bank to respond. If the short sale is "approved", then typically another buyer prior to yourself went through the agony of getting the approval and then either during the process or after decided not to buy. Nevertheless, that is good for you because it means less time to close typically.
If not, then depending on the bank and the systems they have in place, it could take you up to 180 days to actually get an answer or as little as 30-60 days. It's rediculous and extremely frustrating for the agents, the buyers and sellers but fact is, with todays overwhelming mtg. defaults, the banks are understaffed and over worked.
I just had a short sale listing which I received an offer on in September 2008 cancel because I still had not received any word from the bank. I would follow up with them typically 2 to 3 times a week, always trying to stay ahead of the curve and provide whatever was needed. In the end, it was the bank who dropped the ball. All promised deadlines were missed, and I still don't have an answer. After hanging in there for 5 months, the buyer finally decided to back out.
Not all short sales will go like this, but this is good information for you to know and ask to find out what you may be in for.
Good luck with your purchase, I hope is works out to your advantage.
- jzinckgra
- Contributions:92
Thank you both for your help. 1st off, we have not even made an offer. I spoke with the listing agent last night and I asked her about it. I actually asked if this was "bank approved", thinking that if it was not approved as a short sale yet, then it'll take that much longer. She didn't say that it was approved only that the paperwork has been submitted (seller's hardship letter, income, etc). I told her we didn't feel comfortable moving forward unless is has been approved for a short sale. Her response was something like, until we submit an offer, the bank can't make a decision as to whether it'll be sold as a short sale. Huh??? Personally, I don't think the bank has approved it as a short sale yet, but for some reason, she is not telling me that.
If we were to bring in our own agent at this point, what harm can that do? I realize the 50/50 commission split might not be split evenly or at all. We haven't signed anything other than a seller's disclosure stating she represents the seller. I'm sure she would be irritated if I even brought up the possibility, but I wasn't sure in a short sale if there was an advantage to having our own agent.
If we were to bring in our own agent at this point, what harm can that do? I realize the 50/50 commission split might not be split evenly or at all. We haven't signed anything other than a seller's disclosure stating she represents the seller. I'm sure she would be irritated if I even brought up the possibility, but I wasn't sure in a short sale if there was an advantage to having our own agent.
- Jo Shaner, "JoKnows"
- Contributions:12
As a representive of several large banks, the process for short-sales and REO properties are quite different than "normal sales". We deal more with committees when the offers come in. It is not a emotional deal at all - try not to be too logical either.
A good Realtor (even if they are a facilitator) should show you the comps. Our banks tell us the range what is acceptable, allow us to tell unaccepted offers - even though sometimes they list it at a higher price. This listing agent may have "insider knowledge" that might help you more than parachuting in with another agent. You still have a procuring cause aspect, which might leave you paying your new agent's commission.
There is a difference of a short sale and that of a foreclosure. If there are 2 mortgages involved.....hang on to your seat....it's going to be a bumpy ride.
Short sales can be mean also - you have someone accepting a price that really doesn't have title to it. Then, they agree on the price and terms and at any time they change the rules - especially with the agent's commission.
Still, there are great deals to be made and usually the awesome deals takes some finese.
Best of luck to you,
Jo Shaner
A good Realtor (even if they are a facilitator) should show you the comps. Our banks tell us the range what is acceptable, allow us to tell unaccepted offers - even though sometimes they list it at a higher price. This listing agent may have "insider knowledge" that might help you more than parachuting in with another agent. You still have a procuring cause aspect, which might leave you paying your new agent's commission.
There is a difference of a short sale and that of a foreclosure. If there are 2 mortgages involved.....hang on to your seat....it's going to be a bumpy ride.
Short sales can be mean also - you have someone accepting a price that really doesn't have title to it. Then, they agree on the price and terms and at any time they change the rules - especially with the agent's commission.
Still, there are great deals to be made and usually the awesome deals takes some finese.
Best of luck to you,
Jo Shaner
- Kristen Blanchet, "Massachusetts Broker"
- Contributions:526
WOW! The listing agent should not be giving any advice to you since they represent the seller. If you already have an offer submitted it is to late to start working on the purchase of this property with a buyers agent.
I think all around you may be getting bogus advice from this agent. In a short sale the owner IS the seller and therefore would not be 'kicked out' of the house unless the house is already foreclosed on. The owner is the one that would accept your offer contingent upon satisfactory approval of the price and terms with their banks. Even with the house listed at $499,000 once the banks send in their appraisers they may tell the seller that they have it valued at $525,000. Be prepared, you may not know if you have a home for 4-6 months...it is a very tediously slow process. Good luck!
I think all around you may be getting bogus advice from this agent. In a short sale the owner IS the seller and therefore would not be 'kicked out' of the house unless the house is already foreclosed on. The owner is the one that would accept your offer contingent upon satisfactory approval of the price and terms with their banks. Even with the house listed at $499,000 once the banks send in their appraisers they may tell the seller that they have it valued at $525,000. Be prepared, you may not know if you have a home for 4-6 months...it is a very tediously slow process. Good luck!
- jzinckgra
- Contributions:92
kristen,
I don't know if they got kicked out or not, but they are definately out of there, although they left a bunch of junk behind. Apparently it is an ugly divorce and the husband is quite upset and doesn't care if the house is presentable or not.
Anyways, on the home fact sheet, there is a line for disclosures. It says "Subject to bank approval for short sale"
So then the bank has not given the ok to sell as a short sale, right? Even though all paperwork is submitted?
I don't know if they got kicked out or not, but they are definately out of there, although they left a bunch of junk behind. Apparently it is an ugly divorce and the husband is quite upset and doesn't care if the house is presentable or not.
Anyways, on the home fact sheet, there is a line for disclosures. It says "Subject to bank approval for short sale"
So then the bank has not given the ok to sell as a short sale, right? Even though all paperwork is submitted?
- jzinckgra
- Contributions:92
Also forgot to mention the town has a lien on the house for unpaid taxes.
- Guy Ghanem
- Contributions:68
All liens on the home will be cured at closing and will be the responsibility of the bank unless otherwise stated in the purchase agreement, counter, addendums etc... that also plays a factor in what the bank is willing to accept depending on what is owed in back taxes, HOA fees, liens etc...
As to the "subject to bank approval of short sale" that is a precaution a listing agent has to take to protect their client the seller in case the bank doesn't approve the offer agreed upon in the contract between buyer and seller. Although the seller is signing the contract, the final acceptance is through the bank, so quite frankly, a signed O&A between buyer and a default seller has little value until the bank puts their stamp on it.
- Christy Alferes, "ChristyAlferes"
- Contributions:93
Why dont you consult with a buyer's agent from your area. Meet with them and Give all the details you have about your situation - they will advise you how you can move forward. If they cant help they will say so. P.S. interview three agents.
- Kristen Blanchet, "Massachusetts Broker"
- Contributions:526
The lien will be taken into consideration with the sale price that the bank approves so, don't worry about that...that will not be on you to take care of.
Even when the paperwork is all in to the bank it can take several months for them to send out their appraiser and come to a final decision as to whether or not they will accept a short sale and for what price.
The bank looks at all assets and financial information before coming to a decision. In order to be approved for a short sale there must be a financial hardship. Divorce is not considered a financial hardship. If these owners have money in the bank, investment properties or make enough money to be able to pay the mortgage you may wait months to find out they don't even qualify.
Even when the paperwork is all in to the bank it can take several months for them to send out their appraiser and come to a final decision as to whether or not they will accept a short sale and for what price.
The bank looks at all assets and financial information before coming to a decision. In order to be approved for a short sale there must be a financial hardship. Divorce is not considered a financial hardship. If these owners have money in the bank, investment properties or make enough money to be able to pay the mortgage you may wait months to find out they don't even qualify.
- Heidi Zizza, "Heidi Zizza REALTOR"
- Contributions:724
First of all it is too late to bring in another agent at trhis point. Yes it would have been wiser to have your own representation. It doesn't sound great that the offer and the loan amount are so far off. If the people are allready out it means the bank gave them cash for keys allready and the list agent is trying one last shot before foreclosure deed passes and Another agent is brought in by the bank. Once the property comes back on the market as a bank owned home the transaction will bemuch easier. However you should know that banks price these homes are close to what they will accept so there is not a huge amount of negotiating room. I have worked many short sales and foreclosures if you would like more information you may contact me through my profile. I am happy to answer all your questions.
- jzinckgra
- Contributions:92
Just a follow up question, but how long can a short sale be in "short sale" status, if the seller's agent gets no offers? I mean, when does it go to foreclosure then maybe even reo?
Another short sale question
Finally, we should be get our own buyer's agent in an instance like this? I thought in a short sale, there was very little commission for the seller's agent. The agent has submitted all paperwork to Indymac, so I don't know if it would complicate things by bringing in our own agent. thanks.
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