So our move to the Bay Area is back on due to the hubby’s new job. Since we owe more than the home is worth, we will attempt a short sale. Leslie Henderson, short sale expert, is our listing agent and has advised us that given our personal circumstances, a short sale is indeed possible (and no, I won’t be going into the gory details). Recently reduced to $525,000, the house should sell this time around. If you’re interested in buying it, please call either Guy at 775-722-4011 or JoAnn at 775-850-5938. We received one offer this morning and are preparing a response.
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Horacio – You make a very good point. While there are significant (mostly quality of life) advantages to owning your own home, there are also significant risks.
The primary risk that people are talking about now, is the down side of leverage. However, decreased mobility can also be a significant risk. It can make it much more difficult to find a new job. This is probably a more significant risk for younger people, who are less established in their careers, and likely to have less capital reserves.
Just wanted to comment about a short sale process a friend of mine is going though. House purchased in 2006, price around 425k…short sale offer was 290K. Offer received around the beginning of January…still getting the run around with the lender. The truth of the matter is that as long as the owner is making the payment, there is little reason for the bank to approve the short sale. It just doesn’t make business sense. Especially if the ‘hardship’ isn’t something completely ridiculous. A mere job relocation or divorce or whatever isn’t going to sway them in my opinion. Anything with a shortsale and pending foreclosure goes to the top of their list and as the months go by you will be stalled for ‘updated information’, ‘re-appraisals’, etc. This has been my experience in watching the process.
Its no May and it does appear anyone of consequence has looked at the file. And the is a so-called ‘expert’ short sale person prodding the bank weekly to no avail.
A more likely situation would be the bank say ‘Sure sell it, but we will issue you a promissory note the difference’. Which isn’t really forgiving anything…but it does allow you to move the property.
Good luck…but the whole thing sucks. Plus with this recent upturn in the Dow, it may make banks weary of approval if they believe the economy is turning around.
This description by Frost is EXACTLY what happened to my sister trying to short sell her house in Reno. The bank basically said it would accept the short sale price but then required her to sign a promissory note for the “difference”. Now this note will be unsecured and my sister has little in the way of assets for the bank to go after should she default. And a lawyer has told her as an unsecured note it could be discharged in bankruptcy. So the round and round goes on and on………….
Sorry for the delay in responding; I’ve been busy!
You point to two issues raised in a previous response.
1. The “72 hour kick out clause” – this issue arose because a question was raised concerning Diane a lowball short-sale offer subject to bank approval and then being faced with the prospect of having agreed to sell her home too cheaply which arguably, could subject her to a large[r] deficiency. It had nothing to do with the bank responding to the offer within 72 hours.
If you’re a seller [or buyer for that matter], you can negotiate anything you want as long as it is legal and acceptable to the other party. So if you’re a short-seller; and concerned about securing the best offer for the bank [as opposed to you, the seller]; you might want to include a 72-hour release clause in your contract just as you would if the buyer submitted an [acceptable] offer contingent upon the sale of another property. The release clause would require the buyer to either meet a subsequent purchaser’s higher offer [once communicated] during the executory contingency period, or release his/her interest in the contract.
Insofar as your experience that agents of sellers who have accepted short-sale offers contingent upon bank approval refuse to present your [presumably] better offer to the seller and the bank, my personal opinion is the agents’ actions are unethical [but maybe Guy can chime in on this one?]. Agents have a duty to secure the best price for their seller clients, and to present ALL offers. As long as an offer is contingent upon acceptance by a third party, I see nothing wrong with fielding additional offers from multiple would be buyers which may be equally contingent upon acceptance by the third party. Maybe you need a more forceful agent or an attorney?
And yes, I’m serious. We see this more often w/REOs and you can spot them a mile away because the listing generally specifies “special addendum required.” Who’s special addendum? The lender’s. And what does the addendum say? Amongst other things, if someone else offers more than you after the lender has accepted your offer, you’re out and Johnny-come-lately at a higher price is in. And just so you don’t get any ideas, you’ve waived your right to object or to file a lawsuit for specific performance.
The concept is no different insofar as a short sale offer is concerned. Since you’re asking the bank to take a loss, what makes you think it’s not interested in minimizing that loss by including the very same language in a counter-offer?
You opine that you should “track everyday [Argon’s]…foreclosure list [and as listings] turn…from active to active/pending…call the REA, ask the current offer price…and if it’s a great deal offer 5% more.” Well not exactly. First of all, the selling agent has no duty to share the details of an executory contract so he/she won’t tell you what the current offer price is. In fact, it may be a breach of duty for him/her to do so. But that doesn’t mean the agent doesn’t have the duty to present your higher offer as long as an outstanding earlier offer has not been accepted because of a contingency; or, it has been accepted but it includes a “separate addendum required” contingency as I outlined above.
My suggestion is that you do your research ahead of time, and that you target sellers you know are on the cusp of default. Before they announce to the world their listing price represents a short sale subject to lender approval, your odds of getting a short sale offer accepted will be better.