I just learned from my clients that a short sale they had bid on, and lost, has fallen through. “Would they like to raise their offer and bid again?” the listing agent asked. Never mind that the agent directed that question to my clients, not to me, their agent, the fact that the sale fell through is hardly surprising and typical of these situations. The property is a poorly made, poorly located spec house that is already rotting and falling apart. The kid who claimed to be a builder ripped out the appliances and even the kitchen sink before vacating (if he has in fact vacated – when we last viewed it, there was a mattress with sheets on the floor of the living room) and there is no way any bank will approve a mortgage on an uninhabitable dwelling, so that will be interesting.
The winning bidder claimed to be able to surmount that lending obstacle by having the cash to buy the place outright. He either didn’t have the cash or he came to his senses but either way, the short seller is back at the well, working on bidders number 2 and 3. My inclination is to tell the seller (and his agent) to screw off. My clients offered the highest bid on this place last December when it was supposedly going to be sold to the highest bidder and instead of getting the house, the property was yanked off the market and returned six months later with a new minimum price 10% higher than before. That makes sense – the market has deteriorated since December, the house itself has deteriorated even faster, so raise the price.
My guess on this disaster? It’s got a long way to fall before it finally sells. Even if bidder number 2 comes through, I don’t believe he’ll find an appraiser willing to give a price opinion high enough to cover his bid, and that’s if the appliances are returned, the toilets repaired and the sink reinstalled. So the seller is stuck wth finding an all cash buyer, which is unlikely at this price, or accepting a bid contingent on financing, which won’t be forthcoming. In the meantime, the rot continues to spread. I can hear the distant rumble of bulldozers.
Hey Chris – do you have a sense of discounts in the Westchester market? It is more challenging to get good info (perhaps you can take your blog on the road?), plus our broker is insistent that the drop in home values has been minimal which I doubt.
Amtrak, where in Westchester are you looking? The market is softer in some towns than others.
You might want to get a buyers agent who won’t blow sunshine up your skirt on prices. I know a great one in Westchester (I’ve bought two houses with him), if you want a recommendation.
So what is the deal with Short Sales? Is the lender trying to offload them or is it still the responsibility of the owner (builder in this case)?
Why would your sellers stump up more money knowing that the first offer went south? surely that would be an invitation to reduce, knowing that the competition had thinned…or does it not work like that in Real Estate?
Isn’t thew point of a short sale to move the property quickly before the loan defaults (is that right?). If so, and f the house really doesn’t support the valuation why wouldn’t the seller impose an ‘all cash’ condition? It seems very confusing to me…
The seller is very confused, MDH. And no, my buyers refused to increase their offer or make it contingent or waive an inspection. Those were all conditions the seller tried to impose but if we turn out to be the only game in town, the seller will eat it. If not, good luck to whoever does do the deal on the seller’s terms.
Hi Richard – we are looking in Rye, Harrison, Larchmont, Purchase, etc. A recommendation would be appreciated. Thanks.
Amtrak, email me at richard_f@yahoo.com and I’ll send you his contact info.