Modesto Real Estate Short Sales, Oh My!
Do we really need to talk about short sales again? I mean, should we all just wait for the bank to foreclose on the property and sell it after? Or, should we put the property in a quasi escrow with buyers that love the home and want more than anything to own and go through the aggrivatingly slow process of approval for the short sale?
Let us take a look at what one should expect when trying to close a short sale.
- 1) Most financial institutions will not begin the short sale process until the borrower (seller) is at least 60 days behind.
- 2) After the seller is 60 days late the finacial institution will not really talk or negotiate with you until you have an offer on the property and complete a short sale package before they will assign a negotiator.
- 3) The negotiator will let you know that after they are in receipt of a complete package they will get back to you in 10-15 business days to render a decision. (well that is cool)
- 4) Except after the 10-15 business days have elapsed they would like you (the agent) to send them a few items that they (the negotiator) know they have, but in order to expedite the file, they need now and can’t afford the time to look in the file.
- 5) So the same day they request the items you (the agent) fax and email the required documents to them and they reply the next business day that they will get back to you in 10-15 business days.
- 6) You (the Buyer & Agent) are in this process for 90 days and are starting to see that you will be in it for another 10-30 business days.
- 7) Keep in mind the package has been complete except for an offer from a qualified buyer for the 65 calendar days you (the seller) were on the market looking for an offer.
- 8) When I say package is complete I’m talking about a fully executed short sale package from the financial institution including the BPO ( Brokers Price Opinion) or appraisal for the financial institution.
- 9) Approval at this point still may not be granted.
So, there above is a very brief breakdown of what to expect when attempting to sell or purchase a short sale. Which all the above happens before the potential buyer of the property has paid for their appraisal and any inspections they may choose to have or the start of the real escrow period which may take anywhere from 30-45 calendar days depending on their financing.
I for one fail to see why this process is so difficult and time consuming. The financial institution in question seems to create more of a process than is necessary. Let’s look at it this way……
- 1) Homeowner is in financial crisis and calls institution for a short sale package.
- 2) Short Sale package is complete and in the hands of the processor or negotiator, seller lists property with a REALTOR.
- 3) Appraisal for value of property is completed by financial institution
- 4) Homeowner receives acceptable offer and submits to the negotiator along with estimated settlement statement with all proceeds going to financial institution
- 5) Financial instiution either accepts payoff or doesn’t
- 6) If they accept buyer and seller move forward and close
- 7) If they don’t buyer cancels and financial institution forecloses on the property and then sells.
I know… This is way too easy and logical. Let me say something….Either the payoff works or it doesn’t and the payoff doesn’t change by adding 120-180 business days on top of the process. Except that now the homeowner owes more money in interst and principle and taxes and so on. It is what it is! Fire the MBA’s and write a procedure manual and get this done.
This process is rediculous and idiotic. For the life of me, please somebody read this post and explain to me why the process is not ludicrous!
Convince me that the process is there for a checks and balances type of thing and to insure that the financial institution is getting as much of what is owed to them as possible. Tell me that the institutions have not already raped the masses with the exorbitant fees charged upfront and received on the backside of each loan made. When I say this I talk mainly about the liar loans or stated income loans.
Don’t get me wrong….Everyone involved is to blame (here is a list)
- Buyer, (I bet most of you really knew what you were doing and the risk involved).
- Loan Officer, don’t do the loan if your buyer just barely qualifies at the teaser rate.
- Investor, your stocks are not doing well so you loosen your money up rediculously and jump into mortgages because the return is better. GREEDY PRICK!
- Financial Institutions, you cram rediculous programs down your loan officers throats with spiffs and incentives to close.
- REALTOR, don’t sell the property to the buyer you know can barely qualify for the teaser rate payment. SHAME ON YOU!! GREEDY PRICK!!
Oh Man! I think I went on a rant…. All this is true, we can all turn our heads and say “no none of this happened” and you will have trouble explaining the curent events.
We all need to work together to make the processes of correction more attainable.
Any suggestions?
Kelly…
Comments
2 Responses to “Modesto Real Estate Short Sales, Oh My!”
Leave a Reply
[...] Original post by Wallace & Kelly Modesto Real Estate Blog [...]
Well, you hit the nail on the head in that one Mr. Kelly. Everything has become a commodity to be traded, mortgage backed securities, oil, you name it. It would be so nice if the financial world could start over and a loan was just a loan, and a barrel of oil was just a barrel of oil, all to be bought and sold for their actual purposes. Instead they are pawns of the Wall Street gamblers and when they lose, we lose. Talk about Greedy Pricks…