One of the best lessons I've learnt in Real Estate came from a client. I was advising her to wait for a better offer, one that I knew I could get her. She said no, time is money and for every day the property stays on the market, money is lost. ...Say no more; I got it!
Obviously the banks haven't had any such tutor. They have absolutely no understanding about the relationship between time and money. I thought it was only happening with short sales, where the 2-6 months closings seem to be the norm.
Two days ago I brought one of the top banks a cash offer to close in 7 days on one of their REO's. They accepted the offer, but they moved the closing date to 60 days later. SAY WHAT?????????????????? Let me see if I understand this: my Buyer has CASH, and he wants to close NOW and the Seller (the Bank) says: "I don't have time to take your money NOW; you'll have to wait till I get good and ready to take your money?"
I'm still scratching my head... Please help me! What am I missing here?
27 comments • Myrtle Beach Real Estate by Mirela Monte • September 14 2008 02:48AM
I wonder if any of you have had any EXPEDIENT closings with Banks on short sales or REO's. Please share your experience in dealing with these banks!
What is the shortest and the longest time frame you've been able to close on shortsales? How about REO's?
The banks are a mystery as to why they are doing what they are.
I'm just now closing on a shortsale. Four months of pure hell. What is it that they say about too many cooks in the kitchen?
Well it's all true.
Joe: Four months.... That seems to be right in line with the rest of us...
Bob: Don't worry; they don't know either!
Not a problem; the taxpayers (that's us) will bail them out!
The big question is, who are we dealing with in the banks? Do we speak to the representative who is ultimately affected monetarily by how many deals they are turning? Or are we speaking with one of a flood of new personnel hired to shift short sale paper from one spot to another from the piles and stacks on their desks?
Gail, you tell me!
1. How do you know just WHO to talk to?
2. How do you get them to return your calls?
I had an URGENT matter on Wednesday. I found out who the main honcho was at the bank and called him. ...And called him.... .......And called him.....
He finally called me back. You know when? On Friday at 6 pm!!! By then I had already solved the problem and already closed on the deal, no thanks to him!
With your cash offer it probably is that the bank owner doesn't have full title yet. (The 60 days tipped me off that perhaps there are more legal issues to work through.) I've noticed that sometimes the bank owners get these homes on the market before their loose ends are tied up.
It is a mess that most of the time just doesn't seem to make sense. I used to think that bankers were a very smart, efficient group of people. Seeing them make such bad decisions and make things so complex, my opinion has completely changed.
You would think your title would be a bankers motto. Interest incurred on a loss add to the loss at the end. Dunno they are brain dread!
It is annoying and frustrating. What makes me laugh is when a buyer comes to me that wants to buy a foreclosure and has been preapproved by a BANK! I tell them "let's call my lender instead" and explain why a bank is difficult, behind and not the best lender today.
What Kris Wales mentions is correct. The bank most likely does not have full foreclosure documents from the lawyers handling the eviction, foreclosure, title, etc.
I have seen this happen many times, especially in the face of so many foreclosures. I would venture to say that a 60 day closing is not bad. Some banks do not put their properties out there until all docs are ready (which in my opinion) is the better way. However some banks figure they can push the sale and let the buyers wait for the docs. What they do not seem to care about is they actually lose good potential buyers this way.
Mirela, I wish I could understand that one. But here are a few guesses. They simply may have too many REO's in their inventory and are short staffed. There are some additonal legal issues of title, previous owners and claims filed with the MI companies.
Have a good one
Bo
Bo: Right!
Right! ...And right again! Those were my guesses.
However, they really need to get their act together. Why don't they hire some of us to expedite the entire process?
60 days is pretty quick for a closing. Although the banks that I work with want 7 days for a full cash offer.
Louann Cook from beautiful southern New Jersey here.
A good portion of my short sale deals have taken hundreds of days and still did not close for one reason or another. I've switched from trying to do it myself to finding expert assistance elsewhere.
Many Real Estate Offices in my area are turning to Attorneys who say they do short sales. My experience with an attorney-handled short sale did not produce a commission either. The attorney had his secretary do basically the same thing that I did, call the lender and try to work through the maze of people who try not to help.
So I began to investigate other options. There are companies starting every day who say they will do the short sale for you. Do your home work, check them out, how many deals have they closed, how long did it take, how do they show their fee on the HUD1 closing statement, does the lender accept anyone other than attorney's and brokerage companies being paid on the HUD1?
I now work with two Short Sale Servicing Companies and one Loan Modification Company to help the distressed home ower.
One company is just starting to close deals this month, hopefully. Another Company has closed deals as principals of a now-defunct company, and they are just beginning to close deals having formed their own new company.
And there are many benefits to not doing it myself...
As the listing agent, they negotiate for full commission on each deal.
And the time it takes me to work the short sale is dramatically reduced. I can then concentrate on generating new business and leave the short sale to the expert negotiators.
And, if it's not my listing and I'm handling the short sale (or a loan modification) as a Field Rep/Independent Contractor (not paid a Real Estate Commission in any way shape or form), I'm able to collect a fee.
Time will tell which supplier will provide the best solution for the short sale seller. I am interviewing short sale companies almost every week.
If any particpants here have a company that provides superior service and gets us to the closing table on time, please respond and let us know.
Thanks very much. Your comments and suggestions are welcome!
I have the buyer on a bank owned property that we are hopefully (cross your fingers) going to be closing this week. We submitted the offer on May 15th. The bank has countered their own counter (different pricing, terms etc.) no less than three times! Some of them to my clients advantage! It has been a mess and in a declining market who knows if the house is still worth it or not. My client loves it and wants that house so no dissuading will do. Oh, and add DPA to it and it makes for a real fun ride. Best of luck!
Fastest I've closed on a REO was 21 days with a cash offer because the bank has to send everthing to the investor for review to make sure the foreclosure was done properly.
One of my clients sent guidelines 3 weeks ago to this affect:
Cash= 21 days
Conventional financing= 30 days.
FHA = 45 days.
VA = 60 days.
What was said earlier about banks not having loose ends tied up is so very true. I run into this all the time in my business. The most common is the foreclosure red tape. The fastest REO we closed was 14 days but this was a property that was under contract preiously and fell through due to buyer financing but when it went under contract again, it was with the same Title company and the work had already been done. This 14 day closing was so far from the norm. Each property is different and there are many properties that truly go under contract well before the i's are dotted and t's are crossed. I think the key to this is for buyer's agents to educate themselves and their buyers on the process and I have been fortunate enough to work with many AM's who take great pride in their work but have also worked with some where I wonder why they do what they do b/c thier passion to get the end result is simply not there.
Hi Mirela,
I don't do short sales - too high risk for the potential return.
I list and sell REOs. The fastest we have gotten one done is 14 days. Cash, no contingencies, bank already held title, vacant property/ no person or personal property evictions, update title and do the HUD.
They are tough and getting tougher - that is why they need us. However, I am always weighing te costs vs. the bottom line on these listings.
Take care, Laurie
Laurie: REO's are not without risk. As a matter of fact, I've heard some nasty rumors about Countrywide asking for $3Mil E&O coverage on their assignments.
Which organization do you get your REO's from? That may make a difference also.
Banks, who's business is lending and investing money, have now been thrown into the Real Estate business. They didn't really take a long time planning for their new business venture, though they should have known it was coming.
The REO departments we're talking to have mainly developed or grown over the past year and are full of people just doing their job, and they probably aren't very well trained. As you also may have noticed they disappear quite often in the middle of a transaction or listing.
They do this because it allows them to get everything in order... better safe than sorry! Plus the title companies that most of the banks set are horrible and you wouldn't want them trying to close in that amount of time!