Can't believe I'm doing this but ...can we talk about Short Sales again?

[Talyssa]

So as some may have seen, we saw a house yesterday that we LOVE but that we are not sure we actually WANT, but its in that very first step of the short sale where they toss up the listing, gather a bunch of offers, and ship them to the bank to see what happens.

Here is my high level understanding of the SS process:
1) Listing goes up
2) Realtor gathers a bunch of offers and throws them at the bank saying "here is what people will pay for this, so we will sell for that much and then GTFO, plz approve"
3) Bank says DOODLYDOODLYDOODLY for however many months eventually gets back to the person and eihter says no, pay up or we'll foreclose on your or sure, we'll take that offer.
4) If the answer is yes, Realtor goes back through the offers, tosses the ones that are out of the question, goes through the list of the best ones, starts calling at the top and saying "We'll take it" until someone replies "great, we still want it".
5) everything else basically normal transaction on the buying side.


Questions -
I remember someone (SGIP?) saying that short sales are happening a lot faster now.  How fast?  Whats the average time on these now? 

Do I have to submit an offer now for the realtor to call me later, or can I call her and be like "hey, we were planning on waiting a year to buy, but we kinda like this, but we don't want to waste a realtor's time to write an offer when we won't be seriously shopping for another 8 months, can you just call me when it goes through at the bank?"  <-- annoying? Bothersome? She'll laugh and say no because there were other interested people already?  And like I said - we might decide we don't want not it, but what I don't want to happen is to decide in 3 months that we do want it and find out we missed the boat because we didn't put an offer in at this point.  But I mean, heck what's the standard at this point in the process?  I can't imagine very many people who are seriously looking NOW are still going to be around when all the paperwork comes back through.

 

[qwerty]

the offer takes like 15 minutes (or less) for a realtor to write up. there is no harm in throwing in an offer, at least they will think you are serious/semi serious and even if they dont pick yours now they call you back when the bank approves it down the road and the offer they selected has already walked.  i cant imagine they would call you back when the bank approves it before calling other people that actually submitted an offer. I know you are trying to be efficient, which makes sense, but Realtors will interpret your efficiency as a lack of seriousness.

 

[usctrojancpa]

I've been involved with numerous short sales on the buy side.  My experiences have varied quite a bit, from getting a short sale approval to having the bank and/or go radio silent.  I will say that a good listing agent with experience in handling short sales can make a big difference.  It's also important to know how many different lenders there are because the less lenders you have to get approvals from the greater your chances of closing on it are.  Typically smart listing agents will have a below market listing price on a short sale to get offers as quickly as possible.  Remember the process of the seller requesting the short sale can not begin without one real offer.  The listing agent will only send the strongest offer to the bank for approval, not several.  The strongest offer isn't always the highest price one, irfan be an all cash deal.  The days of buying short sales at a steep discount have come and gone.  Today the banks will come back with something around current closed comps. 

If you PM me the address of the go the home I send u the full listing including the agent to agent comments and the property loan detail. 

 

[irvinerealtor]

I've been involved with numerous short sales on the buy side. 

???

 

[usctrojancpa]

I've been involved with numerous short sales on the buy side. 

???

I've submitted offers on over 30 short sales for my buyers but only 8 offers were selected to be submitted to the bank for approval with the last one being on 10 Buttonwood in Irvine where we got final approval but we were in contract on another regular sale so my passed. 

 

[irvinehomeowner]

From what I hear... the thing that gets me is the gateway to submit offers to the bank.

The seller chooses what to submit... so even if you have the best offer... there are some shenanigans that can happen where someone else's will be submitted instead (yes... I've heard the stories of cash back to the seller in the form of furniture "purchasing" or the buyer having some arrangement with either the seller or the listing agent).

I can understand the unnecessary hassle... by why not require the realtor to send ALL qualified offers to the bank? I think that's where a lot of this hold-up with short sales occur... these games that the seller is playing to improve his/her situation because they are losing their home.

I wonder if sometimes the seller submits the lowest offer and tells the bank that this is indicative of what the market is just to leverage a loan mod out of them?

 

[Talyssa]

So how long are they taking generally in your experience, USCT?  I'm aware of the tactic of listing things way lower than the price you actually expect, but if people are delusional enough to think that 1000 sqft on a 4000 sqft lot is worth 450,000 dollars, then they can have it.    We saw a 1600sq ft 3br2ba (or was it a 2.5) on 8000sq ft in a nearby neighborhood in Orange listing for 484 by an older lady doing a regular sale who wants to move oout to south carolina or something.  And when we said that was a bit high for our blood, the realtor acted like there was some room for negotation lower for a faster sale.  It didnt' have quite as much character, but the neighborhood was just as nice and that's close to double the space ...not to mention the extra bathroom.


IHO - I have no idea what's going on with short sales now (hence topic) because I know I've seen casual mentions here and there about how the state of short sales has changed a lot from the early days, banks pushing them through faster, etc.  But as far as I'm concerned, anything I am likely to buy right now is not my forever-house, we are deliberately buying something that is way less than what we could afford  with an eye towards renting it in the future and buying a second something later.  So if there are people out there who want to connive and cheat the banks out of money (which you'd think there would be some kind of legal action for) in order to get a property then thats ok - they can have it.  I'm starting to see stuff pop onto the market that we are actively interested in, so there is always going to be another place out there that we might want to buy.

But yeah, you would think the banks would open up a channel that said "submit all offers here" instead of getting a very skewed view from the selling agent.  Nothing prevents the selling agent from presenting only the data they want the bank to see.      And frankly, I think that will be coming.  Not soon, because financial institutions are very slow to adopt technology - especially when software that contains anything covered by SOX requires the huge hassle of sox auditing.  But there's absolutely no reason that a bank can't say "you want a short sale/loan mod/extension?  Ok.  We'll check these settings here and your property will be up on our website as available for offers for one month.  All offers should get submitted through the built in form for our evaluation"

Or you know. something.  It would be easy from a technology standpoint (and then cost millions of dollars and resource hours because thats what doing software dev at a big company is like).

Anyway I think that level of openness is coming - people will fight it, but its good for the market even if its bad for some of hte people who make money on the market.  The market mechanism only works if information is open and free.

 

[irvinerealtor]

I've been involved with numerous short sales on the buy side. 

???

I've submitted offers on over 30 short sales for my buyers but only 8 offers were selected to be submitted to the bank for approval with the last one being on 10 Buttonwood in Irvine where we got final approval but we were in contract on another regular sale so my passed. 

Perhaps we have a difference of opinion on definitions.

I've driven past San Onofre many times, but would not claim to be a nuclear energy expert. 

 

[irvinerealtor]

...Or you know. something.  It would be easy from a technology standpoint (and then cost millions of dollars and resource hours because thats what doing software dev at a big company is like).

Anyway I think that level of openness is coming - people will fight it, but its good for the market even if its bad for some of hte people who make money on the market.  The market mechanism only works if information is open and free.

@ Talyssa -

<caveat> I don't specialize in short sales but have closed a few on the buyer and seller sides (none representing both sides simultaneously)</caveat>

BofA already has a system in place: www.equator.com, and others are beginning to participate.

Things you can expect:

• You will be required to provide info such as first 5 digits of your soc.sec #, your current home address, your contact phone #, and other personal info. I believe this is to prosecute fraudulent dealings later on, if found.
  The banks will be reviewing the comparables, and pay for an (independent) appraiser to go and valuate the home. The short-sale lender will likely approve values at 90% of appraised value or above. Below that will likely be declined even if there are no other offers.
  If there are multiple offers, the whole offer is considered, not just the price.
  But price is always considered.
  Just because it's a short sale doesn't make it a "deal."
  If there are not multiple offers, the bank's negotiator wants to know why.
  The most important thing is to make sure the home is worth it to you, and not what anyone else (realtor, lender, appraiser, etc.) says.

Good luck, and hope this helps,
-IrvineRealtor

 

[irvinehomeowner]

But there's absolutely no reason that a bank can't say "you want a short sale/loan mod/extension?  Ok.  We'll check these settings here and your property will be up on our website as available for offers for one month.  All offers should get submitted through the built in form for our evaluation"

I second this. But I do think realtors need to still be involved to help both parties.

Anyway I think that level of openness is coming - people will fight it, but its good for the market even if its bad for some of hte people who make money on the market.  The market mechanism only works if information is open and free.

Choir time. There is always going to be some cog... if Linux was really open and free... we would see more of it... but it's taken Google with their "view ads" agenda to spread an "open" OS around more.

 

[usctrojancpa]

I've been involved with numerous short sales on the buy side. 

???

I've submitted offers on over 30 short sales for my buyers but only 8 offers were selected to be submitted to the bank for approval with the last one being on 10 Buttonwood in Irvine where we got final approval but we were in contract on another regular sale so my passed. 

Perhaps we have a difference of opinion on definitions.

I've driven past San Onofre many times, but would not claim to be a nuclear energy expert. 

Come on, the pot shots are getting kinda old.  Where did I proclaim to be a short sale expert?  The short sale process isn't rocket science or some big mystery, especially you've gone through enough a handful of them.

 

[irvinerealtor]

[quote author=USCTrojanCPA]
Where did I proclaim to be a short sale expert? [/quote]
Um, right here, where you quoted yourself.
[quote author=USCTrojanCPA]
I've been involved with numerous short sales on the buy side.  [/quote]

The truth is that zero short sale closings is a far cry from what you are claiming.
The truth is also that your information/advice in this case is incorrect and dangerously misleading.
The truth is that I've passed on many of the other "pot shots" that could've been taken. This particular instance goes past the point where your exaggeration might only harm you, but also others that might trust your claims without having any reference. I recognize how a post like this might be adversely perceived and that it will likely cost me some built-up goodwill here, but I'd rather trade that than abdicate my responsibility to many that come here seeking accurate info to base their own decisions upon that impact their own lives.

The truth is that the dishonesty and exaggeration are what's getting old.
Your choice is to either stick to the truth or be prepared to be called out for it.
Integrity is not a sometimes thing.

 

[irvinehomeowner]

I've been told by a friend who bought a short sale and I've heard from others, that the listing agent can only present one offer to the bank.

Is that true? It would seem to me that the bank would take several offers to just to gauge what kind of interest the property is getting.

 

[irvinebuyer]

I've bid on short sales earlier and from my past experience I know that its up to the listing agent to decide which offers to present to the bank. So its not a matter of how many offer he/she "can" present to the bank. Its a matter of how many offers they "choose" to present to the bank.

 

[irvinehomeowner]

I've bid on short sales earlier and from my past experience I know that its up to the listing agent to decide which offers to present to the bank. So its not a matter of how many offer he/she "can" present to the bank. Its a matter of how many offers they "choose" to present to the bank.

Okay... that's what I thought... I guess it really depends on the bank and the listing agent.

It puts buyers at a disadvantage because although your offer may be the strongest... it's still up to the agent/seller what gets shown to the bank.

You would think that it would behoove them to present the best one... but I guess that's where the games are played.

I can understand the mentality of a distressed owner who is losing their home/large investment and wants something on the side... but if they've been squatting for several months (in some cases a year or more)... that's already quite a bit.

(and again... these are probably the rarities... it's just I know people who've had that happen to them and I couldn't believe it)

 

[iphb]

I've bid on short sales earlier and from my past experience I know that its up to the listing agent to decide which offers to present to the bank. So its not a matter of how many offer he/she "can" present to the bank. Its a matter of how many offers they "choose" to present to the bank.

Okay... that's what I thought... I guess it really depends on the bank and the listing agent.

It puts buyers at a disadvantage because although your offer may be the strongest... it's still up to the agent/seller what gets shown to the bank.

You would think that it would behoove them to present the best one... but I guess that's where the games are played.

I can understand the mentality of a distressed owner who is losing their home/large investment and wants something on the side... but if they've been squatting for several months (in some cases a year or more)... that's already quite a bit.

(and again... these are probably the rarities... it's just I know people who've had that happen to them and I couldn't believe it)

...and this is what continues to get me p'd off about this housing market. Really, in a down market the buyers should be the ones in control of the game. But no, it's the banks and indirectly, the government. Thank you, Uncle Sam and big banks!!!

 

[readytobuy]

The truth is that zero short sale closings is a far cry from what you are claiming.
The truth is also that your information/advice in this case is incorrect and dangerously misleading.
The truth is that I've passed on many of the other "pot shots" that could've been taken. This particular instance goes past the point where your exaggeration might only harm you, but also others that might trust your claims without having any reference. I recognize how a post like this might be adversely perceived and that it will likely cost me some built-up goodwill here, but I'd rather trade that than abdicate my responsibility to many that come here seeking accurate info to base their own decisions upon that impact their own lives.

The truth is that the dishonesty and exaggeration are what's getting old.
Your choice is to either stick to the truth or be prepared to be called out for it.
Integrity is not a sometimes thing.

WOW, pretty strong accusations going on here. I dont know the history behind this but I can tell you this. My husband and I just closed escrow this week with  USCTrojan being our realtor and has been a great realtor to us and done far more than what we would ever expect.

The house we got is not a short sale but he did a great job with a regular sale and I wouldn't say he's someone without integrity or someone who gives bad advice...etc.

with that said, I want to take this opportunity to thank everyone on this board for providing information about Irvine Real Estate and for the opportunity to find  USCTrojan whom has helped me tremendously in making the right decision in buying the right house for us, and also with helping us find resources we need for our remodeling etc...without him we would be stuck with something we didn't like for years.

Anyways,  this forum should be open to different opinions and  people of all walks of life and we can all work though our differences and get along, right?

cheers

 

[davenlei]

USCTrojanCPA was my agent when I bought my home a year ago and he helped me on both short sale offers and regular sale offers. 

On my short sale offer he did a great job and we were one of the top offers considered.  We lost out to another offer that was about the same strength wise (amount of cash down) but they ponied up way more money than the house was worth in our opinion.

We then found the house of our dreams (regular sale) and USC was on it immediately.  We initially lost it to a full price offer (we low ball offered and USC said it was risky) but the 'winners' backed out a week later.  USC made such a professional impression on the sellers agent she called him FIRST to see if we were still interested.  Remember, we were the goofy low ball offer but she still contacted us first because of how USC worked with her on the first offer.  We upped our offer to a realistic (but under market) offer and now we will be in our home for one year at the end of this month.

I have nothing but good things to say about how USC handled our transaction compared to some of the other agents I worked with in the past.

By the way, the short sale house we lost out on is back on the market less than a year later.  I wonder if the buyer is having remorse.

 

[irvinehomeowner]

Just to get this back on track a bit there... I don't think IR2 was saying that USC is a bad realtor... just that the way he posts things may be misinterpreted because it's hard to distinguish context... especially on the Internet.

For instance, and I'll point this out because I misunderstood it:

I've been involved with numerous short sales on the buy side.

That kind of implied to me that USC had done "numerous" successful transactions with buyers on Short Sales. When later clarified, we find out that:

I've submitted offers on over 30 short sales for my buyers but only 8 offers were selected to be submitted to the bank for approval...

So there is a little bit of confusion when saying a "sale" vs a "short sale". When one says been involved in a "sale" that usually means a successful closed transaction... been involved in a "short sale" however, depends on perspective.

To take this further, prior to USC's clarification he said:

The listing agent will only send the strongest offer to the bank for approval, not several.

Which prompted my question because I trust USC's experience and have heard the same. However, that particular point is not actually true as it varies from agent to bank and as a previous poster said... several offers can be presented to the bank.

And I don't think IR2 was taking "potshots"... there was a smiley emoticon at the end of that San Onofre post... he was merely trying to say that anything posted here should have some grain of salt applied because being "involved" does not actually make you an "expert". That didn't mean he thinks USC isn't a good realtor... just that he should maybe ease back on his representation of advice. And again... I don't think USC was trying to misrepresent himself, just maybe the words he chooses so a "in my opinion" or "in the transactions I've seen" thrown in may have helped.

It's an honest mistake... I probably do it too... but although I may not always be right... I'm NEVER wrong . (use that one on your kids)

 

[irvinehomeowner]

So this is what BK says about short sales on OCReader:

Short sales or shadow inventory are good deals and the general consumers are not the first choice that get presented to the sellers. Only friends and insiders of the trades are getting this piece of the action. The agents are not submitting the highest bid to the banks they are submitting only their friend's bid to the seller for consideration and of course the agent gets some kick back in return. This is a classic department store employee trick. The employees stash the merchandize under tables and wait for the price reductions. the consumers never see the products and the insiders get all the best deals.

http://www.ocreader.com/forum/viewtopic.php?p=12552#p12552

Now do we consider that expert opinion or not? He's not a realtor as far as I know but is very respected for his knowledge of architecture and market profiling.