My offer on this property was 110 k. BPO came back at 135 k
Shortsale was cancelled until Jan.12. 07. Bank said that they are still reviewing my offer.
Is there anything I should be doing in the meantime, prequalifying interested potential buyers? Doesent seem like I am going to be able to use a finance buyer unless bank accepts very soon.
Also, is my offer considered to be close to the BPO? Is there a chance they would accept less than BPO(I assume yes, but would be surprised if they accepted 25 k less than BPO appraisal.
Is it an FHA? If so, then they can net as low as 82% of the BPO. Since that is close to your price, I would amend the contract & HUD-1 to reflect that the bank will get this 82%. You can also state in the cover letter that the amount the bank would net is 82% of the BPO.
If it’s a VA loan I think it’s 92% of the BPO. If it’s neither one, then the bank can do whatever they want, but you’d still look good I think by offering them 82%.
I started my buyer’s list with investors that buy at foreclosure auctions. Since you already have it under contract, and I would assume your contract grants you the right to have access to the property to show partners, inspectors, etc, you should be able to show potential buyers the property.
Why is it then that the bank will continue to accept offers? I once had a property listed that I was trying to short. I had a signed contract with the H.O. and the broker continued to accept other offers in behalf of the lender until a higher offer than mine was netted. As such the bank went with them. Note to all; have an agent/broker on YOUR side.
I will guess that the broker did his job and convinced the H.O. that this offer was more likely to be accepted than mine.
Agents/brokers, for the most part, want the most they can get now. They have no clue if you will ever do another deal. When I submit a short sale proposal my offer based on the MAO formula, thus it is lower than most. If a realtor listed anywhere near that price one of these so called “RE investors” will snap it up. Thus leaving me out in the cold though I was the one who found this property, submitted all of the SS paperwork and invested many hours trying to accuire it. Example. I’ve got a house under contract which the 43k second has sold to me for 2k. That brings the home price to 170k+13k arears. The home is worth 210k come May with no repairs. I am trying to short the first now, yeah I know a little backwards. At 183k the home is a deal for a so called “investor” who will see the H.O. paid 215k 1yo. But as most on this site know its no real deal, thus I need to short the 1st to 140k-145k, though in this hood I would goto 160k without crying. If I had the place listed at even 170k it would be gone in a second.
You mean to tell me that a lender does not care if they receive a few thousand less because a realtor gets a commission as oppossed to NO realtor. Come on. You’ve got a house for sale. Two offers. You will net 100k- no realtor. 94k with realtor. Who would you pick all else being equal?
Help me if I am wrong. I want/need to learn. Thanks
I called and talked to two different representatives who seemed to hint that an offer of 10% under BPO would do it. Another rep disclosed that their was a $122,850 in parentheseis on her computer screen. I think this may be the amount (or higher) they will accept. She did not know what it meant.
I have countered at this price of $122,850…waiting for response from the bank
Meanwhile, I auctioned the house for $134,000. The rehabber is aware that I am still negotiating a shortsale and we are waiting to hear from the bank.
The new foreclosure date of 18 January is getting near so have been told by those more experienced that the bank will likely give me additional time to get financing in order.
FYI: Looking at HUD guidelines, I’ve since learned that lenders would take 90% of the BPO in a heartbeat. Of course with an FHA loan, the lowest they can net is 82% of the BPO. I worked on one where the lender had no problems doing that b/c the house had foundation issues.
My first shortsale is getting pretty interesting…The person who was supposed to purchase the home at auction has been slow to get the contract in and his lender has some serious concerns about the property being flipped.
Also, our title company, is not confident we can make the deal work with conventional financing(the title agent cited new tighter rules she has to abide by). Fortunately, we have two cash buyers very interested in the property. One of which is ready to sign- she stated that she could have the cash by Friday. The foreclosure date is on Thursday 1/18. I am hopeful that the bank will give us a few days if need be to get them a new purchase, HUD 1, etc, and set a closing date. My feeling is that the loss mitigation department will work with us once they are convinced we can close with cash quickly.
Just a side note; My counter offer has not been accepted as of today. I think the fact that it will be a cash purchase will make the deal more attractive to the loss mit. department.
I found this to be a very interesting thread to follow. There are a couple of points that I think should be brought up. On your post of Oct. 27 you said
“Also, I am going to get the owner to sign a blank purchase contract on the house. Is there anything I should tell him to assuage his fears of signing a blank contract? I am doing this simply to speed up the process as they do not have a fax.”
I don’t know anyway to assuage this fear. Having someone sign a blank contact is illegal. This document is voidable at the discretion of the seller A voidable contract is a valid contract unless or until voided. This means that the wronged party has the right to void the contract or let it stand as is.
In effect, when you have someone sign a blank contract you are leaving a door wide open for future legal problems. These problems may never occur but they can come back years later to cause problems (i.e. contracts can be reversed by the courts, civil or criminal actions can be brought against you). On the whole, by doing this you are leaving yourself open legally – not the best of choices. You may want to research the time limits that the seller has to void such a contact in your state. Under the Statute Of Limitations in California, a person has three years from the date of discovery to void a real estate contract.
Also, and this may be a small point, RDR in the post of Oct. 26 said “At the point the home is listed no one else can write an offer on the property because you already have a signed sales contract. A seller is only legally allowed to sign one purchase agreement as they cannot be contractually obligated to sell ONE home to two seperate people as they can be sued by one or the other for performance.”
In actuality, anyone can write an offer on a property at any time. I think what RDR was trying to point out is that the seller cannot enter into more than one contract to sell at one time. When I receive an offer to purchase after an agreement to sell has been reached between the buyer and the seller, I contact the new offeror and tell them that the property is under contract but that I will keep their offer as a back-up offer in case of failure of the accepted offer.
How did you conduct your auction? I’d like to learn more about that.
Also, when the BPO was performed, did you meet the agent at the house or do anything else to influence their assessment (such as bringing comps and repair lists etc.)? Just curious…
I don’t know if I ran the auction as efficiently as I could have. I held the first (what would turn out to be 2 auctions) auction before I knew the amount that the bank would accept, just so that I could gauge how much I could offer the bank and still profit. This was disclosed to all bidders before they bid.
You might say that this auction was pointless as nobody would bid their true amount. But, I did actually get a very good idea what reahabbers were willing to pay for the property and helped tremendously in coming up with my max counteroffer to the bank.
Once, I knew how much the bank was going to accept, I held the second auction with the same buyers who bid by round robin format. This determined my buyer. This was the fairest way that I knew of to doing the auction.
This is where I am sitting now…Bank, suspended the foreclosure for the second time after receiving my cash counteroffer. I am looking to close with our cash buyer in the next week or so(hopefully).
I have not posted in a while on this deal because little of note has happened.
As of today…the foreclosure was suspended once again and set for a new date of February 16th. The shortsale negotiator contacted me and suspended the foreclosure(the day of foreclosure) and asked for proof of funds, HUD, etc on the deal the day that it was cancelled. I sent said information to him the following day. The foreclosure date came up again and was suspended once again. I have not heard from him since and have not been able to contact him, even after numerous emails, and messages to see how things were going. The customer reps that I have been working with seem to know little about what is going on with the deal. Communication with the negotiator has been nonexistant after he contacted me to request appropriate counteroffer paperwork.
Two questions for those more experienced:
This is the third time the foreclosure has been suspended, what is going on here? Are they just really that backed up? Is this good for me?
Is there anything I should be doing besides emailing and faxing requests for an acceptance letter and wiring instructions for the title company?