Today’s Morning Email from our Short-Sale Specialist:  Note – the homes lost to auction were not Lund Team clients.

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Date: Sun, Dec 20, 2009 at 9:12 PM
Subject: 911-Regarding Sale Dates

Hi Team,
 
I want to give you a heads up.  The banks are making it more and more difficult to postpone sale dates. We just lost 2 listings to foreclosure this week and we had an all cash buyers for both who could have closed prior to the sale date if the bank would have just issued an approval.  In the last two years I have only lost 5 files to foreclosure…2 were this week.  There is a huge shift in the industry right now.  Foreclosure postponements and approval extensions will be harder and harder to obtain.
 
I was also just on the phone with a rep at Bank of America who stated that Fannie Mae was no allowing for the postponement of most of there sale dates. She also stated not to quote her, but she saw a memo that Fannie Mae would not be postponing any sale dates!
 
This is HUGE! We will do everything we can to keep pushing the files along, however in the mean time, please make sure the sellers are on board and send in any paperwork the bank asks for with in 24 hours. We are at there mercy to have sale dates postponed and approvals issued. ”

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Postponements have helped the success-rate of short-sales, as getting a buyer to stick with the property for 90 days is difficult.  If the buyer drops out of the escrow close to the auction date, we are able to postpone the auction and get a new buyer to commit.   With the new changes, the approval will take crackerjack timing to get approval and close escrow before the home goes to auction.  

I can almost hear the Mission Impossible theme song right now. 

We will discuss the impact and further details in follow-up posts. 

Tyson Lund

This may affect the condition of the house at close of escrow. With a traditional sale (not a short sale or foreclosure) you can expect a house to be in the same condition it was in when you wrote your offer. With a short sale, however, you have to be prepared that the home will be in much worse condition. Per the purchase contract everything that is attached to the property conveys in the sale including window coverings, ceiling fans, fixtures, built in speakers, etc. These items are not guaranteed to be left by the seller when purchasing a short sale. 

Also, the seller may turn off all utilities to the property prior to closing. As a result the landscape may be dead and you may be required to turn on utilities in your name to complete the required appraisal for your loan.

In the end most short sales can be bought at a great price, but be prepared to do some work before it becomes the original house you fell in love with months before.