Just an Oppinion

Ok. I’m just proposing an idea here. I truly believe that this would actually help the economy and would cost the banks money…and only the banks money. If you’re a Realtor, start pointing your buyers towards homeowners who are looking to sell their home in short sale. Obviously, we know that a bank owned property will go for a discounted sale price. Well heads up, so will a short sale from someone who is 4-6 months late on their mortgage payments. Realistically, you will probably get just as strong of a discount on properties as you will from REO,but by directing buyers toward Short Sale possibilities, yoru helping someone, as well as saving the buyer some money. We all know that once a house is sitting empty for about 6 months, its gonna need some work. Who knows how much money these buyers are putting back into the REO they just bought in just standard upkeep and playing catch-up on scheduled maintenance. Also, we get to stick it to the banks… They are gonna be sitting on homes, that are REO for much longer, as well as discounting properties for short sales…Its a no loose for the public.

Well Just my thoughts,
Thanks for listening,




Gavin Kette
Free Foreclosure Help… www.Myloannightmare.com[url=http://][/url][url=http://][/url][url=http://][/url][url=http://][/url][url=http://][/url][url=http://][/url]
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Sounds logical until you make an offer though large servicing lenders like Countywide or Wells Fargo :banghead. You then find out the investor is not the servicing lender 90% of the time. Negotiation then takes weeks or months and your buyer gets anxious and wants to walk. Then after several weeks what you get is not a deal but a counter offer that’s a non-starter :flush.
Countrywide/BAC seems especially determined to make short sales miserable.

I just want to give you an idea of my perception of the market!

I am in the south west, Nevada and Arizona. In these markets foreclosure takes 120 and 105 days respectively, typically a lender takes between 60 and 90 days to approve a short sale.

That’s ok if the short sale package is submitted early in the process, there is enough time to work things out, however when a bank recieves more than one offer they are typically playing one against the other to come up with best offer.

Typically these lenders are only granting approvals about 15 to 20% below current fair market value with considerations for condition and estimated repairs.

Compair that to buying an REO that is typically selling for 40 to 60% of fair market value, banks have to get rid of them so there discounted further than a short sale simple of necesity.

I have done short sales before, in a good market with climbing property values, available financing and strong economic trends buying for 20% below fair market and immediately selling is great.

But the reality is such that a borrower has to meet the lenders hardship criteria in order to be approved for short sale, and in spite of a lot of people in our market trying for approvals, less than 1 in 4 short sales are being approved.

Buyers do not want to wait 60 or more days just to find the lender will not approve the short sale or like Bob suggested they counter with a price that is exorbident and unreasonable.

I am only buying REO’s and properties at auction or from banks directly, this is the very best prices I will get on properties in my market area.

But unfortunately end user buyers are also making offers on REO’s because the lenders are making quick decisions, generally 3 to 5 days and you have a known quantity in a short time.

When a Bank or Lender sits on a REO property, they must hold in reserve 4 times the amount of the foreclosed mortgage in reserve. On a $100k mortgage this is $400k plus the non-performing property note for $100k.

This is all money a lender can not re-lend into the current market until they sell the house, which means capital which might otherwise be loaned on new mortgages or loaned to businesses for capital is being held against a property.

Our financial markets are hamstrung as there is more than 50% of cash reserves being held against real estate instead of making the economy work.

If you hang banks to not be able to sell there REO’s, you hang our economic markets and the ability for business to create jobs.


Gold river,
You said:
“That’s ok if the short sale package is submitted early in the process, there is enough time to work things out, however when a bank recieves more than one offer they are typically playing one against the other to come up with best offer.”

The lender should not be getting more than one contract at a time for a short sale. Legally it’s the home owner doing the selling not the bank. The seller gets the offer and if he agrees the ‘contract’ is sent in for approval. Sellers should NEVER be obligated to more than one contact at a time. And only one contract at a time should be sent to a bank for approval. It’s the law. Realtors who encourage multiple contracts could face some nasty legal problems.