From the plugged-in listing agent for 835 Foerster:
We received an offer several months [ago] for $855,000. It took months to negotiate this sale price with the lenders (both a 1st and a 2nd), not to mention other costs such as back taxes, expenses, commissions, etc., etc…
The lenders unfortunately took too long to approve the payoff (and their losses), and the buyers just pulled out of the deal, citing personal and financing reasons. So yes, the lenders did approve the $855,000 price, but since the contract was submitted several months ago, we’ve experienced a big market shift.
We lowered to asking price to $788,000 [yesterday] and hope to take a new offer(s) to the lenders, and re-open negotiations.
As we said, while a seller and lender might agree, it’s that third party (i.e., the buyer) that really matters. Occasionally, third-party matters such as this can end in some form of novation agreement where one party transfers all its obligations and rights under a contract to a third party, consented by the original counter-party. Once again, purchased with loans totaling $950,000 in July of 2006 up in Miraloma Park (District 4). And as always, thank you for plugging in. ? Listing: 835 Foerster (3/2.5) – $788,000 [MLS] ? While Those Two Agree, It’s A Third That Really Matters [SocketSite]
WOW that must hurt. Lenders drag – buyer’s bail -agent & sellers left holding the bag – or in this case the house
Its incrediable how slow some lenders move. Its even more incrediable how long it takes someone at the lender to make a decison.
@listing agent,
Why wouldn’t you set the price very low and see if any bidders will emerge? Lets say $500k? You might even see offers that are all cash or with no contingencies. Bring any and all qualified offers to the bank and see if they will bite. I am just trying to understand how the banks make these decisions. Also what happened to the people that made the last offer? Can no longer qualify for mortgage? Or bought another place in the meantime?
This is a tough crowd on this site. I must applaud you for plugging in.
Shoulda just offered $680k, to factor in the erosion in value during the time it takes to get a short sale approved. By the time they make a decision, that’s where the market will be!
The lenders have hundreds of billions of taxpayer dollars backstopping their loans. Isn’t it cheaper for them now to just let the loans sour and let the government work it out?
Any sale price has to be consistent with area comps, even for a short sale. The lenders will send out their own appraisers and must approve any offers on the property. They also must weigh the losses they’re incurring in the short sale vs. what it would cost them to do a foreclosure (legal fees in the thousands.) The interest has been very strong since we reduced the price to $788,000.
JP, thank you for sharing your thoughts. I think you are doing a good job of representing the interests of the seller, and I appreciate you taking a moment to explain to us what’s going on. I actually think more RE agents would be wise to do so, as a little bit of transparency goes a long way towards drumming up interest and building trust in the process.
FWIW I turned this listing on to a friend after the latest price drop, and my wife and I gave it serious consideration as well (we have friends in that neighborhood – so it’s attractive to us, but we need a little more yard then what this comes with…). Assuming you can get the lender(s) on board relatively quickly I think you should be able to sell this one for close to what you areasking for.
Am I missing something? As a buyer, why would I bother making an offer when the lender has not approved the newly revised price? Sounds like there’s going to be lots more waiting and there’s a strong possibility that this will turn out like it did the first time around. Good luck JP!
Short Sales and Approved Short Sales are two differant things. Short sales are more dog and pony – let’s throw a price out their and start collecting offers. Approved Short Sales are more like REO deals. Approved Acceptable S.S price is established by seller.
The non approved short sales get 10% to 20% more per deal beacuse of the method.
1. Gather a bunch of offers.
2. Ask for highest and best from all the submitted offers.
3. Then start countering the top 3 buyers.
Gather a bunch of offers
You need to set a low enough price for that to happen.
They did a nice job renovating the interior, but the outside has absolutely no curb appeal.
“3. Then start countering the top 3 buyers.”
4. The buyers laugh and walk away. The next place they bid on is even cheaper.
5. The home, like this one, gets priced even lower.