I recently had a short sale go south. This is so sad because now the Buyers lost an opportunity to become homeowners and the investors lost the chance to recoup almost 75% of their money. The property will now go into foreclosure; the lender will get less; the buyer will not own the home; the seller will have a bigger ding on their credit; all the work 2 agents performed for the clients will not be compensated and we still hear that REALTORS® are the only ones who benefit from short sales. We work for free a good percentage of the time.
I have personally put about money and 100 hours into this short sale with my seller and to have this happen just shows how broken the process is. Here is the scenario:
Property listed at $475,000 – Good FMV for condition & comparables
Offer came in low at $420,000 – Low but good solid buyers
2 months after getting all the paperwork to the lender we get a negotiator
Negotiator says the investor wants $575,000 ($100,000 OVER list)
Buyer said they will come up to $450,000 as it needs about $80,000 work
Investor declines and takes it to foreclosure
Bottom line is that it MIGHT sell for $400,000 to $450,000 down the road but that is more time under the bridge and no one in the original scenario will be involved with the outcome. What a HUGE waste of time and money!