What a joke, buying a short sale-update

DH & I have purchased bank owned properties in the past and know it can be a PITA.
We found a tiny little investment property that is a short sale in our neighborhood last summer. It has been vacant for at least 3 years, the copper/heating is stripped out, the entire kitchen is gone, it has some foundation issues and roofing issues along with a bunch of other things that are not serious.
We made a cash offer, signed a contract with a retainer that would let us out in 6 months if the two banks couldn't decide what they wanted to do.
Our contract actually expired on January 3rd but since we aren't going to live in it and we are not in a hurry we figured we would let it ride a little longer. We've called our attorney & the agent a bunch of times. We were told the second bank approved our offer, still waiting on the first.
I know the house is WAY upside down. Our offer probably leaves 200k outstanding.
Today we get a call from the agent. The first bank wants 20% more than our offer!
Had they taken our offer 7 months ago that would have saved them a ton in carrying costs!
It's such a broken system. These houses are just rotting away and the banks are dragging their feet.
We gave our best and final today which is nowhere near what they want. If we walk which is a very good possibility now this house will sit vacant & crumbling probably for another 3 years! Its nuts!!!!

Update below

Message edited 2/19/2015 8:16:35 PM.

Re: What a joke, buying a short sale

So frustrating! I have a couple of short sale listings that have been pending bank approval forever. I have great offers on both (very close to fair market value), and the banks are coming back with ridiculous valuations, and taking forever to do so. I, along with the law firm that negotiates with the bank on my short sales, have submitted very persuasive valuation challenges (with photos of house condition, ample comps, etc), and we are still waiting.

I think the banks have gotten worse with short sales, even those that used to be better to deal with are slow and horrible now. And they make arbitrary, illogical decisions that cost them so much money.

I totally understand your aggravation and am right there with you!

Re: What a joke, buying a short sale

Are the banks paying the property taxes during this period or is the town just eating these costs until the next owner steps forward?

The carrying costs may not be as big as you think and they see an opportunity to get more money with the market on the up, regardless of how big of a loss they are still taking.

I do agree, the system is very broken.

Re: What a joke, buying a short sale

Message edited 2/17/2015 8:28:05 PM.

Re: What a joke, buying a short sale

What a joke, buying a short sale

Very frustrating! It's a very inexpensive property so we are not doing any financing. We have cash set aside for the repairs. We can close immediately, we are the ideal buyer.
Today we are submitting the repair estimate, only things that would need to be done in order for someone else to get a 203 or whatever financing, not including anything cosmetic it adds 30% to the cost of the house.
Which means our original offer was dead on!
There is no way loosing our deal is a good move, the "owners" split 3 years ago and I'm sure the bank hasn't seen a payment since, they've been paying a property maintenance company to inspect and put the sticker on the door every few months.
Why wouldn't they just want out already?

Re: What a joke, buying a short sale

It's a shame beautiful homes that are just left to rot.

Re: What a joke, buying a short sale

Re: What a joke, buying a short sale

yup its crazy we also did this with a house 4 years ago could of had a young couple starting out with a family raising the property value instead that house is now boarded up. I believe they are trying to change this so banks can't drag there feet

Re: What a joke, buying a short sale-update

I guess the bank came to their senses after they received everything I submitted to them yesterday.
I got the call today, they accepted our best and final only $2,500 more than our original offer!
No where near the absurd 20% increase they were looking for.
Hopefully we will close within 2weeks! We are going to fix it up, it will be a great little vacation or starter home when we are done! One less home to rot away!

Re: What a joke, buying a short sale-update

Posted by KellyFG

I guess the bank came to their senses after they received everything I submitted to them yesterday.
I got the call today, they accepted our best and final only $2,500 more than our original offer!
No where near the absurd 20% increase they were looking for.
Hopefully we will close within 2weeks! We are going to fix it up, it will be a great little vacation or starter home when we are done! One less home to rot away!

Re: What a joke, buying a short sale-update

Posted by Dani

Posted by KellyFG

I guess the bank came to their senses after they received everything I submitted to them yesterday.
I got the call today, they accepted our best and final only $2,500 more than our original offer!
No where near the absurd 20% increase they were looking for.
Hopefully we will close within 2weeks! We are going to fix it up, it will be a great little vacation or starter home when we are done! One less home to rot away!

this is really great that you're doing this. obviously it's a great investment for you, but i love how it's helping revitalize properties in your neighborhood. this is my dream to be able to do!

What a joke, buying a short sale-update

Last time we were trying to buy a new home we had a similar experience. Then to top it of the mortgage was sold to another bank and we had to start all over again! Glad it worked out for you.