I am not a blogger. At least until today I wasn't. As a real estate professional in the Baltimore Washington DC market, I have to admit it is much tougher to survive. You really need to know what you are doing and clearly understand the climate in which we are in. With federal rules and regulation changing almost daily, real estate transactions can and will more than likely be affected. One has to constantly keep themselves up to date and educated on the market to succeed in this business. That is one reason why I choose to earn the designation of Certified Distressed Property Expert. In this market you can't avoid distressed properties (short sales and foreclosures). They are rampant, particularly in Prince Georges County. The more you understand the process of listing and selling these types of properties the more successful you will be at getting these properties to the closing table. Unless of course, you are dealing with a lender or investor that is totally incompetent. Which brings me to my first blog -
I am currently working on Bank of America Fannie Mae backed short sale located in Prince Georges County. Its been on the market for over two years. It was clear that the property was worth less than what was owed on it. In August 08 the seller was no longer able to continue making payments on his loan and we dropped the price to what we thought was aggressive to sell in current market. We got an offer in October 08 for 25% less than the list price. We submitted the offer to then Countrywide. They actually accepted the offer but it took 4 months for them to get their act together to issue the approval letter in Feb 09. By that time the buyer had walked. Since we knew the lender was willing to take 25% less than what we had property listed at we dropped price 20%. We got another offer in March 09 for full listing price. Remember March was when interest rates dropped to 4.5%. March was also when the transition from Countrywide to Bank of America took place. That offer got accepted and we received the approval letter the beginning of June 09. Unfortunately the buyer could not perform, but we got another buyer a week later for the same list price after some negotiating. They were willing and able to close the end of June. We submitted that new offer expecting to get a quick turnaround for new approval letter as promised by ALEX TAMACAS the Bank of America negotiator handling the file. That didn't happen. The negotiator went AWOL. He never responded to emails or phone calls after new offer was submitted. We were then told by another negotiator, RAYMOND WEAR we had to resubmit a whole new short sale package. After almost 3 weeks from initial submitting, we were assigned a new negotiator, GINA THOMPSON. She submitted offer to Fannie Mae for final approval and said she couldn't guarantee time table, but expected an answer in less than a week. Well she got an answer, but it wasn't what we were expecting. Apparently Fannie Mae now thinks the property is worth 25% more than the offer price and they countered as such. WTF.... What - they think the value of the property has gone up 25% in one month? What method of evaluation are they using to determine this new value? Countrywide/Bank of America had done BPOs as recent as May 09. Based on those BPOs short sale approvals were given. Of course I had a fit and emailed the top execs at BofA, my congressman, and called Fannie Mae's toll free number to confirm. I got a response from STEVEN NEILSON of BofA's Chairman's office and he transferred file to a senior negotiator, JEANNIE TORRES. Little help that was. All she did is confirm Fannie wanted more money and said that there was nothing they (BofA) could do since Fannie had the final say. Hmmm - she couldn't argue the case that their BPOs were significantly lower than the values Fannie's 'internal valuation system' came up with? Does Fannie's 'internal valuation system' have actual human beings visit the property and personally evaluate the condition of the property to determine true value? I don't think so. The new system Fannie Mae is using is a joke. I know they implemented it to help streamline the process of short sales but if the values they are coming up with are not true representations of current values (what the market is willing to pay for a property) its useless. More homes will end up in foreclosure as a result. This is a perfect example of "WTF".
The buyer isn't going to pay that much in price and the property will never sell at the price Fannie thinks it's valued at. This property will end up being an REO and BofA will end up losing even more money on it in the long run. I don't think this was the intention of the Obama Administration's Financial Stability Plan.
There are many short sale success stories, but there are many horror stories too. Horror stories that can be and should have been avoided. I encourage other REALTORS to post their "WTF" stories here as well. The lenders and investors need to be held accountable for their actions or lack there of. This is your outlet. And please feel free to use their names.
To be continued...
