-Vancouver WA Short Sales - Great Deals or Nightmares? by Joseph Agosta There is a lot more to purchasing a Vancouver WA short sale property than meets the eye. Getting a behind the scenes understanding of short sale maneuvering can minimize surprises and help the home buyer make informed decisions. A “short sale” is a situation where a home owner is selling their home for less than they owe. The home is usually heading toward foreclosure and the owner is trying to sell it before that occurs. With a “Foreclosed” home, the bank that financed the home has already taken it back. The vast majority of Vancouver Washington short sales have artificial list prices that the bank is unaware of and may not approve. Normally the lien holder, the bank who financed the home, will not tell the listing Realtor how much they will accept. They simply say, “Just bring me an offer”. As a result, the listing agent more often than not, sets the price below the market value and keeps dropping the price until a buyer puts in an offer. The buyer thinks he/she is getting a great deal, when in reality the bank may not accept an offer anywhere near that list price. Another consideration is that the buyer will have to wait 2-8 months to get that response from the bank. Foreclosed homes, on the other hand, have prices that are set by the bank who now owns the home. Unlike shorts sales, a bank will often respond to a foreclosed home offer within 24-48 hours. Many home buyers end up finding a foreclosed home or normal sale they like as much as the short sale property, and are moved into their new home long before they receive a response from the bank on their short sale offer. In Vancouver WA, an advantage to short sales over foreclosed homes is that with a short sale, the listing agent normally only submits one offer to the bank and puts other offers in a back up position. Even if a higher offer comes in, the bank normally does not want to see it. They prefer to look at and address one offer at a time. In contrast, if multiple offers come in on a foreclosed property, the bank will ask the buyers to give them their “Highest & Best” offer. That means the bank will give all buyers who put an offer on the property one chance to sharpen their pencil and give their best offer. Some listing agents know what the bank approved price is on short sales because the bank approved a previous sale but the buyer got impatient and found a different home. Despite knowing the bank approved price, some listing agents set the list price well below the approved price so they can “just get an offer”. Again, the buyer thinks he/she is going to get a great deal without a counter offer if their offer was full price. That is often not the case. In addition, buyers usually don’t offer full list price. In some situations, after the listing agent gets a short sale offer at the artificially low price, they will raise the list price as much as $50,000 in attempts to get a “back up” offer that is closer to what the bank will really accept. This is in case the bank counter offers at a price higher than the initial buyer can or is willing to go. Another situation becoming more prevalent is where the home owner is not only selling their home as a short sale, but they are filing for bankruptcy as well. The bankruptcy trustee has the homeowner sign the home over to them, then charges a $10,000 “carve-out” fee on top of the Realtor’s commission. Many banks are refusing to pay the carve-out fee and after being months into the sale transaction, the trustee will indicate that the buyer has to come up with an extra $10,000 cash to pay his fee or the trustee will not let the sale close. This is despite everyone involved in the transaction agreeing to the sale price months before. Home buyers can get a great deal purchasing a short sale property. Short sales can also be a very costly nightmare. The buyer must be patient and expect to wait months to get a response from the bank . They should also expect a counter offer. As with all sales, the home buyer should do their due diligence and have the home thoroughly inspected, especially since short sale and foreclosed homes are sold “As Is” . |