Are banks becoming harder to work with on Irvine Short Sales?

by Robert Mack on November 30, 2009

in Irvine Real Estate

Everyday that I work with banks on Short Sales, something new happens that makes me wonder if there is any rhyme or reason to what they (the banks) are doing in the “short sale – customer service”.  

I am working with a buyer and we find a great property that is an approved short sale at $220,000.  We had a back up offer on this property and lucky (or should I say unlucky) for my buyer, the first offer was not able to secure financing for the loan and we move right on in.  Now the terms have changed slightly in comparison to the approval, as our offer was $5,000 less than the approved price at $215,000 all cash.  The first offer was an FHA, so being that we were all cash, we felt that we were extremely strong and we would just sit back and wait for a new approval letter. 

Well months go by, and I just don’t understand what could be taking so long.  The only difference is $5,000 from the original approval, and you would think that a $5,000 difference is an amount that shouldn’t take more than 1 week to approve or at least counter offer us.  Well, I get a call from the sellers’ agent and she tells me that the bank has rejected our offer of $215,000 and is looking for a purchase price of $250,000!!  The funny thing is that homes in this area aren’t even selling over $225,000.  The listing agent and I work together to compile a market analysis to show the bank that they are “out of their mind”, and all the bank had to say in response was “offer rejected”.  

I keep hearing(for the last year and a half), that banks are suppose to get easier to work with when trying to negotiate a short sale, and all I keep seeing (and experiencing) is the exact opposite.  I know they are busy and I know that they are getting more and more new applications on a daily basis, but in my opinion this should be more motivation for them to get the files in, open, closed, and move on.  I personally haven’t seen a difference in the average approval time over the last couple of years, and always plan on it taking anywhere from 5-10 months depending on how complicated the owners issues are, and there is still no guarantee that it will even get approved after all the time spent!  To be honest, I feel like it is getting worse, but I hope I am WRONG!

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Post by Robert Mack

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{ 4 comments… read them below or add one }

Ashlee in Fort Worth December 1, 2009 at 1:21 am

Every short sale always has its drawbacks. About the time I think I have them figured out, the banks throw something new at me! I sometimes think the banks just dont want to sell them. Or their negotiaters just dont care!

robertmack December 1, 2009 at 6:34 pm

Hi Ashlee…you’re so right! Each one is so different, and just when you think the process is moving forward steadily they throw a curve ball! They are starting to make it more online based with internet uploads for documents rather than faxing to the customer service rep! Hopefully that makes the process more efficient and smooth and cuts the processing time in half! I’ll keep my fingers and toes crossed! Thanks so much for your feedback….it is very appreciated.

Jacci - Austin December 7, 2009 at 2:18 am

I’ve been in real estate for over 15 years and the it does seem they are becoming harder to deal with. Not from a position of getting approved or rejected, but more on the lack of customer service. It seems the bigger the bank, the less they care!

robertmack December 7, 2009 at 8:10 pm

Jacci – I couldn’t agree more….. the customer service department is the foundation of these banks getting each and every file approved in a timely manner and everytime I call, I get a different story. The excuses are endless on their end…… Sometimes I feel like the only person that even cares about the entire process is us(the listing agents)…..thanks so much for your input.

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