And they found the bank’s head!
It’s no wonder that the majority of short sales don’t ever close escrow. There’s not a week that goes by that I don’t hear a story similar to the one below.
Several months ago I had a short sale property in escrow located in the Boulder Bay area at 39029 Robin Rd. We had it in escrow for $465,000, and after 60-75 days of back-and-forth negotiating with the first lien holder, Freddie Mac, as well as the second lien holder, a private party, we were about 10-14 days away from getting it closed. But Freddie Mac was done waiting. To be honest, they had already postponed it 2 times, which is not out of the ordinary. They decided to proceed with the foreclosure sale and take the property back.
Fast forward to yesterday, when the now “bank owned” property was reduced in price to $429,900, nearly $40,000 less than what we would have sold it for 3 months ago. This makes zero sense! Now, the bank will be taking substantially less on the price, not to mention the added costs of the foreclosure, including maintaining and insuring the property, along with more attorney fees. And what about the parties involved : seller, buyer, and real estate agents?
The former owners now have a foreclosure on their record, which is worse than a short sale. They spent hours getting all the necessary bank paperwork together as well. The buyers had spent money and lots of time with inspections and appraisals which ultimately were wasted. They no doubt moved on from this property after the sale fell through. And the real estate agents? Just another deal where all the hours they put in lead to zero dollars made.
In the end it just amounted to a lot of wasted time, effort, and money for all parties involved.
The only plus side I can see to this is that some future buyer should get a pretty nice deal on this house.
Keep in mind: this is the same Freddie Mac that just asked for another 6 billion in government aid. Maybe if they made some better decisions in these kinds of situations, they wouldn’t have to ask for so much aid?
Sad part is, we’ve got several more years of this kind of real estate market in Big Bear. I hope they can figure it out.
Buying or selling a short sale is a bit of a gamble as there’s so much that can go wrong and a lot of moving parts. Make sure you know what you are getting into if you go down the short sale road.
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