Thanks for the kind words and it feels like abit of a sdr lovefest today – lol.
This was an interesting one for me and a good example of why experience matters. It was listed way too high but I liked that. It meant there wouldnt be much competition because most agent would look at a way overpriced short sale and walk away. Most buyer wouldnt look at it either. The house had long time owners who had done alot of lousy DIY projects over the year. But it was a nice big house, good floorplan, big lot, some views, no one behind etc. It screamed potential but only if bought at the right price. Fixed up it was worth over 600K and based upon what OK is doing could get up to mid 6’s by the time he’s done.
Looking at the loans there was a big 1st and a small 2nd. The owners were old timers who refied out way more than ever should have been given to them. The lenders had to know that getting anything out of them would be tougher than blood from a stone. The 2nd was going to get a token few thousand and the first was who we had to really deal with.
We offered low 500’s and I told the agent I had a well qualified buyer that was prepared to deal with the issues and who would hang in there because he had family around the corner. As a listing agent on a short sale, having a buyer with a strong reason to buy the specific property is a great thing to have as they are most likely to wait out the approval process. The lender did their appraisal and came back at 560K. I told the agent to them too much do another appraisal the house is a mess and no way worth that much. They came back at 550K and I told them the same thing again. I also told the agent to send pictures of the house and estimates for repair work. They came back at 530K and I said too much. You have a house that needs a major remodel and elderly sellers who have barely a penny to their name. You arent getting anything from them and if you take this back it will be tough to sell. It will require even bigger discounts because an investor will demand a built in margin. Or you can spend money making it liveable enough to sell but once you start where do you stop? This house needs to sell for what our original offer is or you can lose even more money. The negotiations to get them down about $50K from their original counter took about 6 weeks. Its not always possible to do what we did on a short sale but this one had the proper set up and the right parties involved. Every situation is unique.
To our benefit we had an agent on the other side who understood what I was doing, the quality of my buyer and that we would close if she could get us an approval. When she hit roadblocks I advised her how to get through them and used some of my contacts from doing so many short sale listings. Unlike most agents she was willing to listen and accept my help.
In the end we got it done for exactly what we wrote the original offer for. I beleive everyone won here including the lender that got every penny of what the house was worth in its current condition. If it went to foreclosure the losses would have been greater for the bank. Its the low comp in the area for a house like it and will likley stay that way for quite some time. In my mind, it had to be to make sense for someone to buy. Now it is good strong hands and will be brought back to life. I hope it provides OK a wonderful home for many years to come.
