A Short Sale Fairy Tale Ends in Nightmare

A Short Sale Fairy Tale Ends in NightmareHere is the story of a Lake Norman area short sale that did not end the way we had all hoped.

In March of 2009 a distressed seller called us to help her through the short sale process. Having been down this road before, we agreed to guide her. We assisted her with getting bank approval to short sale the property and listed it for sale in March of 2009. During this period we marketed the home and had many offers come in only to be withdrawn after the buyers got tired of waiting.

In early October 2009, the bank had us do the customary Pre-HUD statement for them. They had the BPO done (Broker Price Opinion) and countered. Subsequently, the buyer walked away since their offer was 40,000 less than the counter. Tis the season for the lowballers!!

Almost immediately(late October), we received another offer which was more in-line with what the bank countered. Our hopes soared as we felt sure the bank would act quickly. We immediately and proactively got another pre-HUD created for the bank and submitted it.

Now we just waited…and we waited… We made many calls and sent many emails. We were told to add URGENT to the subject line. We tried to be a nuisance to the bank!

Still we waited… February 2010. Almost a year later. I got a call from another agent:

Agent to me: “Remember that house you had listed in the Lake Norman area on ____ street? “

ME: ” Used to have listed, HUH”,

Agent to me: “Yea I am doing a BPO and the banks have changed the locks”. “You can however, come get your lockbox”. “By the way, Is there something major wrong with this house?. I can’t believe it did not sell for the price you had listed!!”

ME: “THE BANKS”

So, there you have the saga of a short sale in this market. Almost a year of waiting on the bank and for what? After going through a few of these, Here is my advice.

If you are a seller. By all means try and short sale your home because while it does ding your credit it is not as bad as a foreclosure. Not all banks are like this but be prepared for a long process.

If you are a buyer. Be very patient and in no hurry to move. Also, banks are not taking every low ball offer just to get rid of the asset, so you have to be reasonable. If you get the home, it still will be below market value. If finding a distressed home is the only thing you will consider (a mistake in my opinion), then you may want to search for homes that have already been foreclosed on and re-listed with an agent. These homes are priced pretty close to what the bank wants and will typically act a lot quicker.