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The Foreclose and Short Sale picture for 2012

The Banks are behaving badly as usual. Most of them don't have anyone that seems to have a clue or cares whether these short sales find a buyer or whether they go into foreclosure or not.
The reality is that when they go into foreclosure there is a lot of time lost, the prices go down and effect the whole neighborhood, and they often resell for a fraction of what they would have sold for as a short sale. This obviously causes other sales in the neighborhood to sell for less because the short sale or foreclosure house sale becomes a comparable sale for appraisal purposes.
Some of the banks seems to have a much better system. 5/3rd bank seems to have a brain when it comes to being reasonable. For instance an appraisal 6 months ago for $170,000 compared to one today for $205,000 is not reasonable. It is not likely that a house appraised for $170,000 three months ago could suddenly be worth $35,000 more. Yet Bank of America seems to think this is fine. VA is now getting involved and we'll see if they can make any changes. This particular house has been on the market already for a year, so why is that the VA is the only part of this loan that cares. Chase bank is now using counselors to help the realtors with their short sales which is amazing and really helpful. Now I feel as though this counselor understands what we are doing, approves and is ready to help make it all work. Wow! I have heard that Huntington is also helpful although I am about to find out! I'll keep you posted.
What is it that doesn't work.
When banks act as thought they don't want to really help make the short sale work, then everyone feels that they are an adversary. It really helps if the appraiser is hired quickly so that we know what the bank will accept and then we can get the listing price correct from the beginning. Or the bank can do the appraisal but require that the house be listed for what the owner owes and gradually bring the price down with the bank being part of that strategy like Chase is, so that they can understand why perhaps the appraisal is not right. If you have the house on the market for around the value of the appraisal and in an entire month you have no showings, then clearly the appraisal is wrong.
All we are asking for is a bank negotiator who wants to help make the deal work for the most amount of money. I think that the Chase model is clearly the best. The counselor is in the deal from the start, they can watch the pricing of the property and they can demand that there are lots of photos of the house which often in short sales is not the case. They can help with the appraisal issues and the pricing and they can really effect the outcome in a positive way.