Countrywide short sale -- I have a listing that is in the beginning stages of foreclosure with Countrywide
Cool Cat
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reprinted courtesy AgentsOnline.net site -- post #131915 - 03/30/07 04:40 PM
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I have a listing that is in the beginning stages of foreclosure with Countrywide.. We listed it for $200,000 Dropped the price to $195,000 on the 3rd month. Dropped the price to $190,000 on the 4th month. Got an offer for $165,000 that we countered back and forth to $171,000, that we accepted contingent on a short sale from Countrywide. We immediately dropped the price to $185,000 where as we received a backup offer for $180,000 that we also submitted to Countrywide. Three weeks later the original offer walked away because I could not get any answer from the negotiator that was assigned to the case. Now 5 weeks later our backup offer is getting antsy. The appraiser that Countrywide finally sent out, appraised it at $188,000.
The sellers originally owed $181,000 prior to foreclosure and penalties, lawyer fees etc... It appraised for $211,000 two years ago when they refinanced. I always maintained that in today's market compared to the competition it was really $185,000 house. They wanted to price it higher based on the past appraisal and what they owed. The house has been listed for 5 weeks now at $185,000 and only had the two offers other than a low ball of $150,000.
Is this normal to take 6 weeks for an answer?
Will Countrywide accept this offer of $180,000?
Will they pay 6% commission 3% and 3%
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#131948 - 03/30/07 09:04 PM Re: Countrywide short sale [Re: Cool Cat]
amplet amplet
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Is this normal to take 6 weeks for an answer? Yes very common, make sure to set expectations with and buyers/buyers agents about to submit an offer. If they can't be patient, they may lose a good deal.
Will Countrywide accept this offer of $180,000? Who knows? It depends on a lot of factors. Put your negotiation skills to the test and find out. Don't take "no" for an answer. Get on the phone and push this thing, do not wait for them to get back to you. They are busy, and if you bug them enough they might want you to just go away by taking the offer. But make sure to be so polite it makes yourself sick. Good luck.
Will they pay 6% commission 3% and 3%. Maybe, but doubtful. Submit it anyway. They will always say they are taking a hit, and so should you. Negotiate, Negotiate, Negotiate.
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#132036 - 03/31/07 12:08 PM Re: Countrywide short sale [Re: amplet]
pogibaby pogibaby
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Originally Posted By: amplet
Is this normal to take 6 weeks for an answer? Yes very common, make sure to set expectations with and buyers/buyers agents about to submit an offer. If they can't be patient, they may lose a good deal.
So when you going to write an offer on a short sale what is the number of days do you normally give to seller to respond? Would you do the same, a longer time period for response on a REO?
Thanks
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#132038 - 03/31/07 12:13 PM Re: Countrywide short sale [Re: pogibaby]
OHAgent OHAgent
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You can give them however many days you want. Most of the time they will respond when they respond and it will have nothing to do with the date you put in your offer. If you are representing a buyer on a short sale, let them know that it can take a long time for the sale to go through (if it goes through) and if they are in a hurry or on a deadline, a short sale may not be the best idea for them. In my experience, it takes longer for a response on a short sale (unless the listing agent has done most of the paperwork already) than it does on an REO.
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#132040 - 03/31/07 12:24 PM Re: Countrywide short sale [Re: OHAgent]
pogibaby pogibaby
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Thank you OHAgent.
So in order to represent a buyer well, what paper work should I make sure that the listing agent as done?
I am working with several buyers who as interested in both a short sale property and a REO.
Thank you
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#132047 - 03/31/07 01:50 PM Re: Countrywide short sale [Re: pogibaby]
super realtor super realtor
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Step 1:Make sure you are talking to the right department
Step 2:Determine what kind of loan it is fha,va,conventional insured,conventional uninsured.The answer to this question will determine how the file is handled and what process the loss mitgator has to use.
Step 3:How far out is the foreclosure?Is there a right of redemption in your state?Has anyone filed bankruptcy that is on title?Has title been checked for any hoa liens,judgements,tax liens,junior mortgages etc.?If there are liens they have to be negotiated down and released before you even waste your time with the senior mortgage company.The loss mitgator will not even consider the offer until he knows what the payoff is for releasing the other liens.The loss mitgator has software they use to give them an analysis of if they foreclose with attorneys fees,rekey,trashout,maintenance etc. what they would get and then another scenario based on the offer they are looking at now.
Banks are more motivated in states that you have to use the judicial process instead of the non-judicial and have redemption periods because it is costly for the lender and when the homeowner elects to sell they waive there redemption rights which is attractive to the lender.
Typically reo's respond in about 3 days to a week because they have already completed there appraisal and assesment of the property where as with a short sale they have to get evaluations and go through many hoops to qualify for a mortgage insurance claim or there claim could be denied.Before paying a mortgage insurance claim the insuring companies want to make sure the servicer/lender has tried other workout options first and that proper protocol has been followed handling the defaulted file.
Banks pay on short sales typically anywhere from 5 to 6 percent for 2 agents.I just closed one with citibank that paid 6.When you list these it is key you say the price and co-op is subject to bank approval otherwise if you put a co-op of 3 and they only pay five you just made 2 percent for all that work minus your broker split.This is why when I list I put 2 percent offered to the selling agent in the listing agreement and 4 to me the listing agent then in the mls I put 3 co-op subject to bank approval.This way agents can't say we presented full price offer and want the commission even though bank denied the offer,they also cannot say seller offered 3 percent to selling agent so the seller will have to bring the extra 1 percent to the table.
I am honest and tell the agents upfront that the bank might only pay out 5 percent total and in that case they will get 2.5 and I will get 2.5.Usually you don't find out for a while what they will payout as commission.
To usually get the bank/servicer call them early in the morning and make sure you have an authorization to release signed and have faxed it to them.I usually send along with an authorization to release a copy of my drivers liscense and my real estate pocket card so they can see I am who I say I am.
Short sales do take months to do from start to finish.Some will fall apart,make sure you explain to the sellers if they do not go along with the short sale the bank will end up foreclosing and ruining there credit and most likely pursuing a judgement for the loss against them.The bank will probably issue them a 1099 but a savvy tax accountant can handle the gain given to the seller for the irs.
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#132049 - 03/31/07 01:58 PM Re: Countrywide short sale [Re: super realtor]
super realtor super realtor
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Forgot to mention that each loss mitigator has a about a hundred files they are handling in different states with different timelines,they really do not have time to chit chat.
Forget leaving them a message,they try to return your call but it never happens,keep calling until you get them and see what the next step is in the process,some have papers they will fax you with a checklist others will just tell you over the phone what they need.I have found so far that every single bank is different and some are more organized than others.The default departments for banks aren't as streamlined as the lending sides.
Usually short sales only represent a small percentage about 3 to 5 percent in the portfolio of there defaulted properties.
As these arms and i/o loans adjust combined with softening appreciation look for banks/servicers to specifically set up short sale departments to handle the overload.
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#132057 - 03/31/07 02:42 PM Re: Countrywide short sale [Re: super realtor]
pogibaby pogibaby
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If a property is already in the foreclosure process will it have a better chance of getting lender approval for a short sale vs a property not yet in foreclosure?
I am also beginning to think that it maybe better for my buyers to look at REOs instead of short sales. The transaction seems to be a little cleaner with an REO. What do you guys/gals think?
Thank you very very much.
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#132072 - 03/31/07 04:02 PM Re: Countrywide short sale [Re: pogibaby]
OHAgent OHAgent
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Originally Posted By: pogibaby
So in order to represent a buyer well, what paper work should I make sure that the listing agent as done?
In a short sale, the seller has to submit things like financial documents/hardship package to show that they really can't afford to pay for the house. The bank isn't likely to approve a short sale for an owner who has the means to bring his mortgage up to date but just doesn't want to. The lender is also going to want to have the house appraised/evaluated to see how much it's worth. Every lender is different, but it's not usually a fast process, so if I had a client that had to be in their new home by a certain date (say, less than 2 months), I probably wouldn't look at too many short sales. Sometimes they can work great for buyers who can be flexible about when they close.
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#132351 - Today at 10:58 AM Re: Countrywide short sale [Re: OHAgent]
AndreaS AndreaS
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Registered: 03/21/07
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I closed a short sale with Countrywide back in late Jan and it was a tooth pull. Countrywide refused to respond in writing and it caused a great deal of distrust from the buyer's agent. We were supposed to close in December but the buyer started trying to renegotiate the offer and dragged his feet in spite of my warning that an IRS lean was about to be recorded. Sure enough, 2 days later when we were closing the IRS beat us by a day and it caused an additional 30+ day delay while trying to get the lien removed.
It turns out the the work-up person kept presenting the wrong sales price to management because when I got final VERBAL approval, it was for $7,000 less than what the buyer was offering. When the final payoff demand was issued to title, we figured out that the work-up person was reading the estimated sellers proceeds (Winforms) wrong. The work up person warned that if I wanted a re-approval at the higher amount it would cause further delays so the Buyers Agent and I decided to work out the left overs in the transaction ourselves. When the buyer was advised of the error on Countrywide's part, he immediately decided to claim it all for himself (of course) and still try to get all the credits that his Agent and I promised to help put the darn thing to bed. OH NO YOU DIDN'T!!
In the end, we worked it out, but CW really made a mess of an already difficult transaction.
**Hint-I got some really great advice from a local long-time agent about dealing with CW while they are dragging their feet to respond. He told me to tell CW that "Of course I have advised my client against this, but since the seller is struggling to put food on her table, I wouldn't put it past her to start selling some of the appliances just to keep the power on." Since the seller still owns the property and has a right to do what ever he/she wishes with it until the bank gets it, this tends to get the lender off start a little quicker. Not to mention daily 'Friendly' calls to the work-up department and vm to the managers that you haven't received a call back.
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#132355 - Today at 11:06 AM Re: Countrywide short sale [Re: AndreaS]
AndreaS AndreaS
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Oh yeah-the commission question-
CW originally said they don't pay more than 5% total comm. Since the deal came to a standstill I decided to wait everyone out and stopped calling everyone. Finally the lender came back to me (VERY IMPORTANT) The work-up person called me to see what the progress was and had a slip of the tongue and said 6% to me when talking about the commission, which gave me an idea.
Try reworking the #'s at 6% commission with credits to the buyer to try to get back to the price CW was looking for. You could probably get them to accept it if it's within $4000-$5000 dollars of what they were looking for.
CW told me they would pay up to $3600 in NRCCs but nothing for repairs. I'm sure the buyers agent would like to seal the deal as well. Since you are running the show, see if the buyer's agent will credit too. That's what I had to do, and it finally worked.
reprinted courtesy AgentsOnline.net site -- post #131915 - 03/30/07 04:40 PM
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