We in south Florida are having a declining market and projected to continue to decline into 2010.

There is a property on short sale, owner paid 650K in 2005, says he spent 200K remodeling it and finished 80% of it, so there are work left to be done. They listed the property for 349K. I offered 270K back in January 2009. Sellers accepted so we have an executed AS-IS contract pending bank approval, we have been patiently waiting ever since.

The listing agent advised me that there are backup offers, but they only presented mine and the paper works are with the bank.

The listing agent just called me a few minutes ago, saying they heard from the bank...the bank says my offer of 270K is too low for them to consider, and that I should give them my best offer.

She told me initially when they listed the house back in 2008, they did an appraisal and it was 350K. They also said recently the bank did an appraisal and it's 400K. I asked them for comps, and the listing agent said actually there is no recent transaction in that neighborhood to comp against, so she pull one property out which is half the size sold 7 months ago and figured a price/SF, and extrapolated this home with the same price/SF to a suggested price.

First, I am not sure any sale 7 months ago can be used as comps. Second, I have every reason to believe the market will continue to decline.

I wonder why the bank did not counter me with a price.

I am thinking perhaps the bank does know about ALL the offers, and not just mine as the agent insisted. I think the bank is asking all of them for their "best offer", thus creating a bidding scenerio instead of just negotiating with me. Could this be the case?

I have always thought they would either counter with a price or reject, but never ask for a best offer. Is this common practice now?

Each bank is different in how they handle things. The sellers list price doesn't mean squat.They just do that to draw people in.What the sellers has done to the property is irrelevant to today's value.If this property is in a subdvision yo ucan check the tax records and recording dates. This will show ALL recent sales not just what is pulling up on the mls.

Sometimes I have to pull the tax records for the whole subdivision to find comps.

It sounds like their are back up offers but the asset manager wants to see if they can do a deal first with you before going to the other offers.

They did appraisals or a bpo? In a declining market how could it be worth 50,000 more in a year's time? Obviously there are some flawed evaluations somewhere.

Make your highest and best and walk away.Put FINAL and underline it on the contract.The price should be at if it's declined you are glad you didn't overpay.If you have comps to support your position I would supply those as well.

400k and 270k is a 130k gap.

Tough to get in the middle with that much to move. Good Luck

how can I find out what the dates are for the foreclosure if they do not strike a deal, and possibly who the bank is.

Pathfinder
I work with the banks on these issues. You have to realize that here in Florida we are a lien hold State. With that what you have to realize that here the seller barrowed money. The payback term etc is the note. The seller barrowed money. What they did with it is not the seller’s lender concern. They secured that note with their home as collateral. What you are arguing with the value of the collateral. The lender is still owed money. Just because the value of the collateral is lower does not mean they are not entitled to their money. Two separate issues. What you are trying to do is negotiate with the note holder in releasing the collateral. What they are saying is we want more of what this guy barrowed upfront before we just release the collateral instrument. And even then the seller’s lender may still want a note for the difference.

Let me put it another way. Your seller from what I read barrowed $650,000 and now you want the person that he borrowed the money from to take $270,000 and call it even. Let me ask you something forget the home and its value that is not part of it. But if you lent someone $650,000 and they came to you and same here is $270,000 let’s call it even. What would you say? Probably the same as this lender, No I want more, much more. I can pretty much go out on a limb here and say even if you somehow get the lender to agree they are not going to forgive. You are going to get to the closing table and the seller is going to be asked to sign a note for the difference. And then the seller is going to say no. And everyone walks. And to risk of forclosing the lender is looking at two things. #1 most likely they have PMI insurance that covers some of the lose. So their lose is not as much as you might think. And #2 even if they forclose they will still have the judegment.

In your case I can tell you the listing agent was plain stupid and put something out there without knowing what to do and or even checking on whether it can be done.

And to answer your question how to find out the dates. The easiest way is to check the county court records online. Pop in the currant owners name and then open the case. There you will find the doc of the case and look for something like this
2/5/2009 1 NTC OF SALE 03/03/09 11 AM DC

If you cant find it pop me an private email with their name and I will look it up for you.

By the way I was born and raised in Miami. Shorties by Dadeland is my favorite BBQ joint

Thanks for all the replies. Alan I did find a foreclosure case from the County records but I cannot see the actual document because it requires "Premier Access". I am not sure if I am looking at the right case...I will send you a message.

I heard from the agent again.

She said initially the seller did an appraisal in early 2008 and it was 350K. Recently the bank ordered one and it came in 400K. The bank is now giving me till Monday to submit a new offer, they will either accept or reject and if they reject they will relist the property at 400k.

The agent (who works for the sellers) told me she found out about the appraisals but not supposed to tell me.

She also told me that there is only one backup offer, at 299K from another couple who she questions if they will qualify for a mortgage. I am the only one she knows with perfect credit score and will get the loan easy. She also told me she's not supposed to tell me the amount of the backup offer, and also the backup offer was sumbited to the agent, but seller never signed it, and the bank does NOT know about it.

She advised that I resubmit a new offer as close to 400K as possible by Monday.

I wonder why she tells me so much information, and whether there is a game going on. I think my best number is 300K and I will walk away if they don't deal.

I found another property closed at 650K in 2006 and now in foreclosure inside a country club listed at 205K and bank is willing to take (from another agent) 150K cash. There are lots of good deals out there so this is my leverage.

If they relist the house at 400K, can I submit an offer again at 300K?

I am wondering what would be my best move...(1) To tell them 270K is indeed my best offer and leave it at that. If they relist I just submit a new offer at 300K. (2) Modify my offer to 300K and see what they say.

Pathfinder you are not making any sense. If they value came in at 400k why would they accept 300k.They would just foreclose. Asset managers are looking at all options and choose the one they feel net's them the most return.If you can get another one for 150k why are you messing with this one at 400k.

The agent is telling you the price to show that you need to come up for the bank to CONSIDER taking the offer.You are thinking about all this psychological stuff when the bank is looking at a screen with costs scenarious and making a decision.

Yes you could wait for the short sale to fall through.The property could be bought at foreclosure or sold bank owned later on.By then you could have a bidding war though if the price is low.

Buyers think these properties are sitting and rotting. YES the overpriced ones are butthe reo's priced correctly or that have had 2 to 3 markdowns will go under contract in 24 to 48 hrs.So if you find a deal you can't screw around.

super realtor I understand what you are saying. I think my wandering is partly due to the fact that I don't know how much the seller's agent telling me I can trust. This is a peculiar situation where when I initially call the broker who is the one with the name on the for sale sign, he told me he is a "personal friend" of the seller and is doing this to help his friend. But then he told an agent who works for him to do all the work and I am dealing with that agent most of the time. The agent kept telling me "things" that she said she is "not supposed to tell me" (for example, she told me that there was an appraisal at 350K and later at 400K). Then the broker would tell the agent things that he "heard" from the seller side, which when my lawyer called the seller's lawyer he heard a whole different story. The property I really like, the transition and the people involved really smells.

My lawyer told me Friday each bank has their own acceptable loss percentage and it's possible they will take 15-20% less of BPO and I should have a real chance if I submit an offer at 20% off BPO.

The other property sounds too good to be true, but it also mean I have to start the whole process again, I have been working on this deal since Jan 2009, so mentally it's taking a toll too.

One last question I have...since it's an AS-IS deal subject to loan approval and inspection, I will do an inspection. Let's say I do an inspection and it comes back with $10000 of repair. Being AS-IS, they are not obligated to fix anything, I know that. But can I at that time request a price adjustment (say not $10000 but meet half way $5000) and how would the bank react to that?

I feel like I should finally chime in on this one.

Here are some points about your situation that you need to understand.

1. Some previous appraisal that was done by the seller a year ago is irrelevant. The new appraisal done by the bank is all that matters to the bank.

2. You are most likely dealing with a listing agent that doesn't work on too many short sales. It seems like they are all over the place trying to explain themselves.

3. The bank wants as close to current value as they can get. Some banks do have an acceptable loss percentage of up to 20% of the appraised value that they will net. So the closer to the value that your offer is, the better your chances are.

4. The banks analyze numbers of how much they will regain from the short sale and how much they would regain from foreclosing and selling it on the open market themselves. If they know that they can get close to $400K for the home, then they will wait until it forecloses if your offer doesn't come close.

5. You mentioned that the bank did the appraisal in January I believe. Usually the short sale appraisals are only good for 90 days to the bank. They do not like working with appraisals that are older than that. You may be able to have the listing agent request a new appraisal being that the timeframe will allow it and you can get a second appraisal opinion in. If this one comes back lower, then that might be your golden ticket.

6. In regards to your last question about the inspection repairs, you can always ask for whatever you want. It doesn't mean that they bank has to pay for it. This may hold up your entire deal because I am sure that the request would have to be submitted to the bank and have to be analyzed as a deduction from the net proceeds that they will get. They may just decline it, which they probably will, so know that going in.

7. I would not rely on waiting until the bank forecloses to buy this home. You have no idea of what will happen from now until then. The bank may sell it at a private auction first or they may sit on it for several months which is typical before throwing it back on the market. You will never know when it was about to ome back on the market. The only date you can access publicly is the notice of sale date. This is the date that the bank basically has the trustee sale and the bank will usually end up taking the home back due to lack of bidders and price. Then the bank will hold the property until they are good and ready to list it with an REO agent.

Hope this helps.

OK This is finally coming to a close.

Agent 007 to answer your question the latest bank BPO was done in April, not January. January was when the house was listed by the agent and I submitted the offer. The listing price was 349K, I submitted an offer of 270K. Seller signed off so all along we were waiting for the bank approval.

Then I heard the bank did an BPO and it came back to be 400K. I was then told to submit my best offer to them. I sent in an offer of 320K on Monday, and finally today the agent called and told me the bank rejected the offer and says they would not consider anything less than 375K. Why they didn't tell me last week and saved me the time I have no idea. The agent then told me I need to write a letter stating I am going to cancel the contract and that would free up the property and I would get my 25K deposit back from the escrow agent.

What I don't understand is, when I heard anything from the bank, it's always verbal. Always the agent heard from her broker, her broker who is a personal friend of the seller, and he heard from the bank...never anything written, and when I up my offer, change closing dates, etc...every time they wanted signed addendum and everything in writing. Now they reject my offer and I have to write a cancellation of contract?

Why don't they write "DECLINE" on the contract and be done?

Is there something fishy there? I would love to get a written decline from the bank, is that possible?

Oh and I was given an explanation by the agent why the bank wants 375K. She said it has nothing to do with the BPO price but has to do with the loan amount. The seller financed 100% at 650K in 2006. I was not aware of this...I thought they look at the appraised value and loan amount is irrelevant. Something does not feel right about this thing. Or may be it's just me being paranoid.

Pathfinder
It’s like I said two separate issues
First the bank is not approving your contract. You are trying to get them to accept less then what the seller barrowed. The home and its value has nothing to do with that. The home is just the collateral that the seller put up that they would pay the money back. The collateral can be valued at a penny. That still does not change the fact that $650k was barrowed and they want it.

But there is no way they will get 650 back. The house was appraised at 400 unless they can create a bidding situation with some buyer that are emotionally attached to it. I also heard that the lone backup offer is 299K and they won't up the offer either. Guess they would have to relist it and go through the process again, would be interesting how much they will relist it at.

The house across the street which is waterfront (on the Las Olas river which is a wide river with direct ocean access no fixed bridge) is listed at 520K and has been sitting for 9 months and still available. They cannot list it anywhere close to that price.

I wonder, if there is a way to make my last offer work by changing terms?

For example, if I take off the loan qualification and offer to pay cash;

or to prepare a list of issues - I am a licensed professional structural engineer and I have a mental picture of the repair the house needed (it has a foundation settlement issue and that alone would cost 20K to repair) and I can probably make a list of repair to show what needs to be done to the house;

I wonder if it's worth the effort to submit my offer but with a cash offer and some bank statement showing sufficient funds and a list of major repair, would that have any effect on getting it approved?

or the lender in a short sale situation follows a formula with no human considerations and it's a waste of time?

Would really appreciate thoughts on this. Thanks!

Really not much reasoning you can do. If the bank has a BPO that says $400K then, no matter how you present it, a $320K offer will be rejected. I agree that it may not even be worth what their BPO says but THAT IS IRRELEVANT to the bank. They have their # and that's that.

I chased a short sale for months with a buyer. Home was listed at $275K and we offered $225K. Home was worth $225K MAX!!! Bank said they had a bpo for $300 and would not take less than $265. Long story short: Bank foreclosed, cleaned up and sold home for $180K last week.

Where is the sense in that?

Path
You are missing the point. The problem is the guy barrowed and owes $650,000. What he did with the money is not the banks concern. You are arguing that they are not owed because the collateral that was offered is not worth that any longer. It does not matter they are still owed. And what the bank is saying is we will release the lien but still want our money. I would expect just like a deal I just closed where the seller had to sign over an unsecured note for the difference. What the bank is actually saying to everone is we want more of the money up front before we turn this into an unsecured note. Bottom line is get the seller or owner of the property to put up more money and or collateral that is worth more. You forget the bank did not buy the home. They only have a lien on it. They are saying this guy barrowed $650k and we are not taking $270k and calling it even. Would you? No you would not. Don’t confuse the value of the collateral and the note itself.

Ok are you from New York? "barrowed" LOL

Alan I just had to throw that in there afte rI saw it a bunch of times.It's ok I do it to.:)

Pathfinder what did I tell you before? Wasn't it something like the listing broker will list it LOW to get offers on it. Then they will pray the bpo comes in low for the bank so they will accept your low offer or come in at a close counter.

The bpo,appraisal whatever came in at 400k. So your value is low to them. I can't tell you when I was doing short sales 3 to 4 years ago how many foreclosed and sold later for a less amount than offers I recieved as short sales.Alot of it has to do with pre-foreclosure protocol,filing for insurance proceeds,and foreclosure costs and whether the asset manager feels the market is trending up,down,or flat.

I think you are beating a dead horse here.The fact that you come up with all these hairbrained ideas show you REALLY want this house and the asset manager knows this. YOU NEED TO MOVE ON.....

No I am from Miami
I have no Idea why the rest of the world is wrong LOL LOL

Liberty City.