http://www.blogger.com/post-create.g?blogID=7163329180838770632
I have all kinds of questions with this article.
I have never did a short sale where the bank relied on my comparables. The banks complete their own evaluation (BPO - Broker Price Opinion) and often times have to do two because the approval process takes so long. Which brings me to another point. When listing a home that is depreciating at 3 to 5% a year and it takes the bank 4 to 9 months to finish a deal, isn't it reasonable to list the home taking into account what the value will be by the time the home finally closes. The banks have wised up to this AND intentionally try to complete the BPO as soon as possible to get the highest dollar only to sit on the file for another 3 to 6 months afterwards. Over the course of the transaction the buyer watches the value fall and ends up backing out of the deal. The agent has to find a new buyer on an overpriced listing now and a bank that will not cooperate in lowering the price off of the BPO that was completed 3 to 4 months prior. If you should convince the bank to redo the BPO they have now wasted that $50 -$150 at their own game.
Another thing this article does not talk about is that many of the homes up for short sales are thrashed inside because they were investor specials run into the ground. Many short sales need carpet, paint, sometimes the appliances have been ripped out and backyard/pools have been totally ignored. I had one where toxic "things" were left in the garage. The bank never worked with me on the price when I explained what was involved in selling the home hence the lower price. The home went to foreclosure AND sold less then what my original offer was. I hear these stories all the time.
Banks use BPO's because they pay the Realtor $50 to $150 to complete one as opposed to an appraisal completed by a professional appraisal company ($450-$550). The BPO's (ordered by the banks) are completed by Realtors who base their information strictly off the internet and many times (not all) never visit the home. The banks do not know the condition inside and the evaluation comes back at a higher price.
These investors come in, fix up the home, they may carry the note or carry a portion of a note if the buyer does not have enough cash to purchase the home. Please tell me how this "buyer" is going to "buy" this home from the bank. Banks do not carry notes for people with bad credit. For this risk of unconventional financing isn't it plausible for the buyer to pay "more" for the home. Kudos to the investor for selling a home, making another homeowner who "consumes" for their new home.
I have seen foreclosures get dumped onto the market at ridiculously low prices and pending within hours. The banks are listing these foreclosure based on the SAME bpo's completed for the short sales. I CAN SAY THIS FROM PERSONAL EXPERIENCE. So for this article to say the bank isn't getting a fair chance at the best buyer is far and few between and no different then what is happening with foreclosures.
What people do not realize is that the banks sell some of these homes to investors in blocks (portfolios) completely discounted to investors already. So where is the fairness in that to the taxpayer. There have been numerous cases where the banks intentionally declined a short sale in order to collect the insurance of the full amount after foreclosure.
I am sorry but this article just irked me because it gives no credit to the people who are trying to move this economy and doing the best they can despite all of the insider politics happening with the banks and short sales.
Investors have been flipping homes for years. This is what they do. If the bank is stupid enough to let a home go for below value (which they do anyway with foreclosures and bulk portfolio sales), ignoring their own appraised values then so be it. There must be a reason. Investors are thinking "outside of the box" to make this economy move and all the banks want to do is whine and complain some more.
Please.
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