San Diego Housing Bubble News and Analysis

Well it is good the requested the BPO. Has it been completed yet is the question. Also sometimes they get an appraisal in addition to the BPO. It varies. Depending on your offer do you know if it washes out the second totally or not?

I would give an 8-12 week estimate before you have confirmation. Sounds like you are about a little over 4 weeks in?

I believe the BPO has been ordered/requested and I am certain that both banks are only going to take a small loss (~50K total). I don't know how they will divy up the loss though. Yes, we are 4-5 weeks into the process. My main concern is not that we won't get the house but that our offer is worse every month we have to wait. In my mind the offer should drop 5K or so every month.

If your estimate is that the value drops 5k a month, then hope and pray they take their sweet time in getting back to you, if it takes four months, you will save 20k. One realtor told me that when they list a short and it is low price leader, multiple buyers submit offers. By the time the bank responds, the prices have shifted and they buyers all balk. With shorts they aren't bound by the offer. Then they modify the listing and advertise an "accepted price" and new buyers try to lowball that price, causing more delays. The banks are hurting themselves by moving slow in a rapidly decreasing market.

Hi yellow -

You need to sit down with your realtor and have him/her explain all the pros and cons of a short sale. They can be very frustrating for the buyer but also they can get you a great price if you have patience. They are not for the faint of heart, and if you get emotional about your home purchase they will age you fast.

The biggest thing about them that you have to fathom is that you have no control over them. Neither does your agent. The listing agent has a tiny bit of well... not control but at least he/she can expedite the process slightly by making sure all the docs are in and the package is complete. Additionally he/she can make a call into the negotiator or loss mitigation officer regularly. Not to much so that they piss them off but enough to make sure they don't forget about the transaction.

Try to remember that each negotiator has potentially a couple hundred transactions. While yours may be special to you, it is just another file on the desk to them.

So while you may steam and take it all personally and think..."I am gonna show that bank who is boss by laying the lumber on them and reducing the offer" the processing queue will not speed up one bit and in all probability you will lose the home. Every time a new offer is submitted a new HUD needs to be sent in from escrow and the process starts ALL OVER again. Similarly while your offer is in the queue other offers may or may not be submitted by the list agent. It all depends on many factors. If the offer you submitted was ACCEPTED by the sellers and then sent into the bank you are in good shape. If the offer was sent into the bank without acceptance by the sellers then the listing agent can indeed get more offers and send them in if they like. Now, sometimes listing agents will not send in more offers because as I said, they risk derailing the negotiators processing and the timeline pushes out longer.

My advice to you is to continue to look at other homes. If you like them put an offer on them. Ask you realtor to fully describe the pros and cons of the short sale process and what YOUR expectations to be with regards to timelines, and ask him/her to continue to poll the listing agent to see if other offers have come in and jumped yours.

Don't let the process kill ya.

SD Realtor--Our offer was accepted by the seller and the house is not listed anymore. We contemplated trying the whole "reduce the price by 5K every month" thing but decided not to for the same reasons you mentioned--it would probably just piss everybody off we'd lose the house. No matter what, we should be the only offer until the process is finished.

Temecula Guy--So how does it help us to wait four months, considering we have already put in the offer? Our first offer will be priced 20K too high after four months but we will not be getting the discount...Please exlain.

yellow you are in great shape if it is accepted by the seller. I understand the mentality about knocking down the price by 5k each week or month. Funny (in a sad way) how when the lenders are working on a loan for you they can get that done in 3 weeks but when it comes to dumping a home it takes em 12 weeks. The fact that the realtor pulled the listing so that no other offers can be taken and submitted to the bank puts you in a really good spot.

Just try to be patient, ask your agent to check in with the listing agent every week or two, and don't be afraid to keep looking at other stuff every now and then.

On the financing side is where you may be most exposed. Since you cannot really lock in financing until the lender authorizes the sale, just make sure you keep an eye on rates so that you are not caught by any nasty surprises. In reality the odds are 50/50 that your rates will be better when the sale is accepted so you never know, the delay in processing may just be a blessing in disguise.

Keep positive and hey, you got 5 weeks under your belt so you are perhaps halfway there if not sooner. We got an authroization on an Escondido property after 8 weeks very recently so hang in there.