MY experience, as a short sale BUYER

So I was under contract for over 2 months on a short sale with a partner that I invest with. We were very hopeful and excited that we were going to get the property, at a screamin deal. We had our offer submitted for quite a while.

It was a property that I had listed myself, and it was scheduled to go to foreclosure auction on Jan 7th of this year. Well, we thought that since we had an offer that was reasonable, not just some stupid lowball, that the bank (Suntrust, 1st and 2nd loan) would be willing to extend the foreclosure sale date and give us time to negotiate with them. The reason I thought this was because I have worked with Suntrust, as recent as last November which is only 2 months ago. I had a deal with them that I was the listing agent, and the buyers DID lowball, and Suntrust extended the foreclosure sale date (I didn't get this listing until 1 week before the foreclosure sale) and we closed the short sale, for WAY less than the seller owed.

So I was going off of a past experience.

Well, it turns out they rejected our offer. We found this out the day before the foreclosure sale. So my partner and I hit the phones...desperately trying to get them to extend the sale date. I told them that if they just let me know what the 1st lien needed to net---because we knew what the 2nd needed to net for them to sign off on the deal---that we could fill in the blanks and list it at the right price to get them what they needed.

For some reason, Suntrust totally denied us and foreclosed on the property. You can imagine the despair. It was HORRIBLE! Because they didn't give us a chance. We found out, about 10 minutes before the sale happened, that Suntrust was only SERVICING the loan for Wells Fargo, so Wells Fargo was who was calling the shots. They DIDNT TELL US THIS!!! If we had known that, we have worked with Wells before, and we have contacts in their loss mitigation department that we could have called on, etc. We feel like Suntrust really dropped the ball on this deal.

The funny thing is....we KNOW exactly how much was owed, we know that the 2nd lien was wiped away because of the foreclosure sale, we know all the costs associated with foreclosing, AND WE KNOW IF THEY WOULD HAVE TAKEN OUR OFFER THEY WOULD HAVE MADE BACK WAY MORE MONEY THAN THEY WILL NOW. I am going to follow this property and watch to see what happens....I bet it is listed for about $140k. I bet they end up with an offer of $130k...which was what our offer was. But then Wells has to pay a realtor 6% to list, they have to pay the foreclosing attorney, they have to pay insurance, utilities, cost of money/time, clean out costs, etc. My guess it that they will net about $15k less than if they would have just taken our offer.

It goes to show that not all banks are rational...in my humble opinion. The short sale industry is extremely dynamic, constantly changing, etc. Especially with the "bail-out" money not all spent yet...we have no idea what is really going to happen.

I will update this blog with the list price and sale price of this property when it hits the market. I cannot wait to see how dumb Suntrust/Wells Fargo was by not accepting our offer.