Archive for selling
Final Short Sale Blog Post
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Client X: “I’m a little bit late on this final update but I sold the house! There were a few last minute issues involving nosy neighbors and an HOA board that absolutely refused to help me but in the end it was worth it to close the doors on both the house and that chapter of life.
We received a cash offer on the house that was more than the asking price and then it was just up to the bank to give the green light to make it happen. In the meantime, we had an extremely nosy neighbor that was trying to contact the bank and Realtor to give unnecessary input on the property. Fortunately, it was annoying at best and didn’t result in any delay in the already drawn out process. My biggest hurdle in the 11th hour was dealing with the HOA. I’m not sure what I was paying for during the years that I owned the townhouse but it definitely wasn’t bubbly customer service. The Hacienda Real HOA was impossible to work with and wouldn’t even return our phone calls. In order to make the numbers work for the short sale we needed to get the dollar amount owed to the HOA and they wouldn’t call us back to make sure they got paid!
Despite all of the set backs, delays from the bank and buyers backing out, it all worked out in the end. It was a huge relief the day that I went with my Realtor to sign the papers and relinquish responsibility of the property. I hope I’m never in a situation where I’m forced to short sell again but it was the best of a bad situation.”
Why Is This System So Broken? A Wells Fargo #Fail
Posted by: | CommentsI know there is no shortage of Realtors out there who are talking, blogging, yelling about some experience where their client has been wronged by the government or some big bank. And as inclined as I would normally be to avoid such a saturated topic, I truly believe these stories need to be out so the general public can hear them.
Recently, one of my very best clients came to me to discuss options for one of her properties. In 2007, she had purchased this home and shortly thereafter, as her situation changed, she needed to leave it. Determined to do “the right thing”, we sat down and discussed the possibility of the home as a rental. She ultimately decided to rent the home at a significant loss each month so she could either wait out the market or see what the future held for her. That was a year and a half ago.
Grossly under water on her negative cash flow rental and after almost 18 months of doing “the right thing” something had to give. Finances would no longer allow her to carry the rental at a loss and it was time to look at the property as a potential short sale. Again, we sat down and discussed the options- Short Sale, Deed in Lieu or Foreclosure. And once again, prepared for the uphill battle associated with “the right thing”, we listed the home as a short sale.
This client is a Short Sale listing agents dream- meticulously organized, logical, intelligent and motivated, she wanted to get out from under this property and was prepared to do what she needed in order to make it happen. We had genuine hardship, and could show that rental values did not come close to covering the mortgage even with zero vacancy.
The property was purchased for $217k in 2007- no refinances, just plain old purchase money. The bank, Wells Fargo- A company who (in theory) should be at the forefront of the initiatives to help struggling homeowners. A look at pricing puts this home somewhere in the low to mid $90’s given the array of terms and conditions associated with a Short Sale.
We list at $99k and wait… and wait… and wait some more. Finally, Bam- Offer time! We receive an offer at $89k from a well qualified Buyer, owner occupied, motivated, all the good stuff. About this same time, I see the same floor plan in the same subdivision, with similar amenities close escrow at $87k! This is too good to be true I’m thinking- I’m gonna slam dunk this thing and make my client’s day (or year)!
The offer, along with a novel of documentation gets submitted, reviewed, and is found to be complete, so now we wait… and wait… and wait some more. Finally, I hear back:
Response from Wells: “I am working on the above referenced file and we have received the value back from the investor. The offer presented is too low. The offer you sent in nets $81,906 and the investor is requiring a net of $106,480. Please communicate with the buyer and get back to me within 48 hours.”
What?!? Are they serious? Are they looking at the same house I am?
I go back to the Buyer, present the info and get them up to $91k. I also put together a letter of explanation, complete with comparable information and stats from MLS making THIS deal right, and resubmit.
Response from Wells: “Thank you for the new documentation. The offer presented however, will not meet the net required by our investor. At this point, I will pass the file to negotiations for review to see if they can proceed. Thank you.”
Ok- Surely the negotiations department will be able to, well negotiate.
Response from Wells NEGOTIATOR: “Your offer submitted was reviewed and rejected by the Investor. As you were informed by the Processor, the Investor requires an offer which will net at least $106,300. Please be advised the Investor has instructed us to remove this file from Short Sale.”
Ugh! Dejected, disappointed, confused and just plain pissed, I return to all parties and kill the whole thing. Dead! Seller, still (bless her heart) offers a deed in lieu which Wells Fargo graciously accepts, taking the property back to add to their impressive portfolio.
Here’s where it breaks- A few days ago when my trusty MLS search popped up showing that the property has been listed, this time as a Lender Owned home:
List price- $97,900 WITH 3.5% closing cost assistance and a $1,500 bonus for the Selling agent. Net contract price (assuming full price) is $92,900. With a few basic assumptions and facts on the cost associated with the process to get the property to this point, commissions, upkeep and the such; I think that we can assume that this property will now net considerably less than the offer I had to kill just 2 short months ago.
Wells Fargo, I suppose I should thank you for the story- unfortunately, it’s another in a long line those ending in a fail for someone trying to do “the right thing”.
Short Sale Story (Cont… #2)
Posted by: | CommentsClient X: “I met with Joe a couple days ago to start filling out paper work to do the short sale on my house. Since I have already started to get rid of furniture we decided to go to a restaurant across the street so we had a decent table to work at. The fact that I had a coupon for free chips and guacamole helped a lot in this decision. The paperwork seems fairly straight forward with the main exception being the portion for the lawyers. I understand the main gist of it but I don’t want to focus on it too much I guess. According to the lawyer paperwork there is a fee that goes along with their paperwork which I believe I will have to produce before I can meet with them and have them go to bat with the mortgage company for me. I honestly have no idea how I’m going to make this happen since I currently don’t have a job but I’m hoping I will figure something out.
If everything goes according to schedule I will be listing the house one week from today and will be moved out of the house at the same time. It’s really hard to live in a house for one week because there are certain things that should need to be packed but I can’t pack until I leave. That being said, it’s almost like camping in a house right now. Despite the fact that I will be losing a lot of money by going this route I still feel that it will be better for me in the long run as compared to doing a deed in lieu of foreclosure or just a foreclosure. I’m trying really hard to not think about the amount of money I will lose and focusing on the next residence and the next opportunity that presents itself.
I am very curious to see how much interest there is in my house. I have always loved it but I suppose this really opens it up to public opinion. I also have some work to do on the house over the next week or so to get the house presentable. I don’t believe there is much to do as far as fixing things so much and just a solid cleaning of the house. Most of the things the Joe suggested weren’t a surprise to me and were things I had planned on taking care of anyway. Ideally I want people to fall in love with this place just like I did when I came to look at it. That can’t really happen though if I’m not taking care of it.”
Short Sale Story
Posted by: | CommentsSo I, like the rest of you see a lot out there about Short Sales- they are everywhere, especially if you work, live or breathe around the world of Real Estate.
However, what I have NOT seen much of is the impact of Short Sales (financially, emotionally and otherwise) on Sellers from the Seller’s point of view. I think that most people have very specific opinions of who these people are, what their situations are and what led them to those situations. I also think that in many (most) scenarios, those opinions are probably not entirely accurate.
So without further ado I present “Short Sale Story” a series of posts written by and told through the eyes of Client X. This IS intended to be a discussion as well, so if you have questions for me or Client X, please feel free to leave a comment.
Client X: “Due to a number of different issues involving divorce, jobs (or lack thereof), finances and the economy I’m forced to give up my house in hopes of salvaging what little I can of my life and hope to start over someday. Obviously this is not an ideal situation and I will be losing a substantial amount of money “on paper” during this process. However, it is clearly better than going into foreclosure so I’m giving this my best shot in hopes that I can find a buyer and I can get out of a loan that I am severely upside down on (thank you to the people that helped destroy the economy. I owe you one…seriously.)
At any rate, I’m currently reading through the paperwork and trying to wrap my head around the different items that will need to be accomplished. The thing I keep going back to is that just because it’s a short sale doesn’t mean that I shouldn’t have the house completely presentable. I have a few things that I need to take care of which will help the house be more presentable and hopefully sell faster.
The other item I keep reminding myself is that there is really nothing to be embarrassed about in regards to taking the short sale route to remedy this situation. I think at this point selling the house is the most responsible thing I can do as compared to ignoring the problem at hand until I’m given an auction date and eviction notice. I’ve never been one to stick my head in the sand and I fully intend on facing this head on. I truly feel that with my realtor, my family and my friends on my side I will make the absolute best of a bad situation.
That being said, the plan is to list the house next week and hopefully get some interest and see where it takes me. Right now “hopefully” seems to be the key word for me.”