How do you express that it is not logical to think logically? And why would you even try to do such a thing? Well…let me tell you. When you are an agent in the Phoenix market and you are trying to explain the “short sale process” to your clients all logic is lost!
I just spent a few days with a very nice couple who are moving to our area from another state. Even though we talked about the potential pitfalls of making an offer on a short sale…as luck would have it…the home they fell in love with is just such a home. A short sale.
Without going into details…I can tell you some of the specifics….(the dollar amounts and bank names were changed to protect the innocent)!
Home was listed as a “pre-approved” short sale. In this case the approval price was NOT the list price. Why? The listing agent never did clearly answer that one. Could it be that the home would never have appraised at the approved price and that is one of the reasons the first buyer walked? Maybe. I am just guessing. But the “pre-approved” price was $700K and the new list price is $610K.
Anyway,my clients made a full price offer based on the new list price. The listing agent says she can get an answer in 3 days from the first lien holder. It has been my experience that this is not the typical time frame…but I really want to believe her. So we should hear TODAY if the first lien holder accepted our “full price” offer or not. Then the agent has to go to the second lien holder and negotiate with them based on what the first has agreed to give them to release their lien.
Ok…here is the reason I am writing this. Here are some of the very logical questions my clients have been asking me.
“Why would the bank not be able to make a decision in three days? That should be plenty of time…and don’t they just want to avoid foreclosure?” (this home has a sale date pending)
“What is the longest we may have to wait for an answer?”
“We made a full price offer so doesn’t the bank have to accept it?”
“What is the best case scenario?”
“What is the worst case scenario?”
“If it takes more than the three days why can’t the agent just tell the bank we are cancelling our offer if they do not respond forcing them to approve our offer?”
“The sellers still own the home so why do they not have to make repairs if we find something that is not working? We had to make repairs on the house we just sold.”
“If the sellers have not been making their payments don’t they have some money to kick in to the deal if it is needed to make this work. The other agent said we (buyers) may have to pay something to the second lien holder to get this house.”
“How can we be sure the sellers will take care of the pool and the landscaping while we are in the process?”
“How can we be sure the sellers will leave the attached fixtures like the ceiling fans and all of the appliances?”
‘Do the sellers have to leave the utilities on?”
And the most logical one of all…
“Why would the bank not just give a price UPFRONT that they would approve before the home is listed?”
ALL of these questions are great questions and I have done my best to answer them. Then I have to tell stories like…
The home that was in escrow with an approved short sale days away from closing when the bank proceeded with foreclosure. Why…because the short sale department and the foreclosure department do not communicate well.
The home that was “missing” all of the fixtures including sink faucets at the final walk-thru.
The deal where the bank’s approval letter required the sellers to sign a $50K promissory note to release the lien.
The deal that took 14 months to get approval….and on and on and on.
Yes. Short sales are getting better. But it is a challenge to try to explain what we have been trying to understand ourselves for over two years now!
But please…help us by thinking positive thoughts that the listing agent can indeed get the first to approve today. And the second is reasonable with their approval. I really want my clients to get this home as it is perfect for them!