Tales From The Short Sale Trenches
With two thirds of the local Northern Nevada listings being Short Sales today, it is important to know what is going on in the World of Short Sales. It is especially important to remember that each Short Sale is unique unto itself and these stories shouldn't keep you from buying or selling such a property. Remember, forewarned is forearmed. Seller's circumstances vary, the lenders and their investors vary, the market changes, etc. There is no one formula for success.
While many Short Sales go through handily, there are those that defy logic, reason, and sanity. We had one such situation last week causing us to call a U.S. Senator for assistance. What caused such a drastic action? Consider the facts. On December 30th we received a Short Sale approval letter providing that escrow close by February 21st. No problem, everyone went in to action and we are well on our way to closing. On January 18 we got an amended Short Sale letter saying we had to close on January 25th. Whoa! What's going on?
Correspondence with the lender revealed it to be a FNMA ... Fannie Mae ... requirement and they will not postpone the Trustee's Sale (foreclosure) which is scheduled for February 2nd. The Buyer's lender said she can close on the 4th, but no movement by the bank until January 24th when they said we had until January 31 to close. This with a Seller expecting her fourth child on March 1st not knowing if, or when, she is moving. For the sake of a couple of days there may be another bank-owned property in the neighborhood.
We had another dandy experience with lender Short Sale lunacy last week. Here's the back story - Listed at $235,000. No action until priced at $189,000. Two offers - one at $184,000 and one at $165,000. Bank counters $197,000 which is accepted. We motor along getting ready to close when suddenly the bank comes back with a price of $250,000, a requirement of the investor. Clearly, the home is not worth that kind of money.
We assemble information to show value, confirm with all parties that they are at their maximum price and contribution and go back to the lender. The lender accepts the original deal, which was theirs in the first place, and we continue on for a couple of days. The bank comes back at $222,000 from the investor ... Fannie Mae ... with no give. The market just isn't there, but the investor is locked up. Had to get some tricks out of our sleeves on this one ... we'll see if they work.
Our Advice: It is amazing how belligerent the investors are becoming. Yes, it is their right as it is their money, but it seems senseless for them to negate viable Short Sales only to acquire the property via a Trustee's Sale. They seem to be forgetting the human side of things - the homes that are being destroyed and the incredible emotion that is tearing at so many people these days. Most sellers are victims, not strategic Short Sellers. They are selling short because they have to. Whether job loss, divorce, illness, transfer, or any other valid reason, it is beyond their control. Had prices not dropped they could sell and move on with their lives. With the market being what it is, they have no choice but to sell short or let it go. When they opt to sell short they don't deserve the emotional roller coaster that is thrust upon them by inconsiderate lenders representatives.
Stay strong in your Short Sale. It can be maddening, but stay the course and you will be justly rewarded. When it comes to choosing professionals to assist you with your real estate needs.
Lisa Wetzel and Jim Valentine are the authors of this blog. Lisa, Jim and Jessie are experts in Carson Valley , Carson City and the tri-county area of Douglas County , Carson City and Lyon County. Call our team anytime at 775-781-5472 or 775-781-3704. To Search for Homes go to: Carson Valley Listing Book or visit our website at www.CarsonValleyLand.net or www.CarsonValleyLand.com