I just had a weird and illogical experience with a short sale, thought I’d share.

The house was listed for 629k, there was a single loan (Countrywide/BoNY) with the initial balance of 650k. I made an offer of 590k in late July. Last thing I heard was on the 15th: “they have made progress on your offer – now that we know the bank thought $845,000 instead of the $665,000 – so your offer now looks much better!”. (apparently there was some kind of internal miscommunication regarding either the value of the house or the balance on the note, I’m not sure)

Yesterday afternoon the listing was taken off the market, this morning there was a foreclosure auction. The opening bid… 531k!!! Sadly, I did’t have that much cash (lol) and no one else was interested, so it went back to the bank.

I could understand if they wouldn’t sell the house to me because they thought that the house was worth more than what I was offering. But it completely escapes me why they’d let it go to foreclosure with an opening bid of 531k, when they already had an offer for 590k. Even after realtors’ fees, they’d be better off accepting our offer.

I still haven’t heard from our agent, I wonder how he’s going to explain this.