By now just about everyone has heard about how frustrating short sales can be. Waiting week after week for any new news. It seems like many buyers look at bank owned listings just to avoid a short sale nightmare.
I just wanted to share a story on a bank owned property that my client currently has in escrow. This was a very aggressively priced property in Big Bear Lake. Going in my client (who is very real estate savvy) and I knew there was going to be more than one offer. We wrote a very aggressive first offer, over asking price and very clean. We expected to at least get a best and final counter from the bank but were hoping the bank would accept his offer outright.
There turned out to be four offers on the property and all four potential buyers were given the standard best and final counter. Of course the bank only gave us a 24 hour window to submit the best offer we could.
Well, to make a long story short, my buyers went up in price and were able to get a verbal acceptance of there counter offer. So about two days later, we finally received the unsigned counter from the bank.
Now we were a little leery of not having signed paperwork because the property was such a great deal, even at the price my clients had to stretch up to. My clients feared that someone else would come and offer an insane amount, even though the offer was already verbally accepted. We submitted the counter back to the listing agent and requested the bank sign the counter and original offer ASAP.
So about five days later, and after numerous phone calls from my stressed out clients, I finally get receive an email with the entire contract signed by the bank representative. Whew! My clients could finally stop holding their breath. So I thought.
It took the bank another five days to open the escrow.
The moral of my story is not to avoid bank owned properties and short sales, it is to show you that the banks (during a short sale or REO deal) expect you to jump when they say jump but they are going to move at their own pace. Which is often similar to a snail.
So what can you do about it? Not much, just be prepared and realize that this is the market we are in and make sure your agent is on the ball. Your agent should be following up with you and guiding you through the process. Even if nothing has changed since the last update.
It makes a world of difference knowing that someone is watching out for your best interests. That is why it is so important to use an agent that has experience in dealing with whatever type of property you decide to buy. Whether it is a short sale, bank owned or probate, pre-qualify your potential agents so you are confident you can put your trust in them.
Are the transactions more stressful? Without a doubt. Is it worth getting emotional and worked up over? Not if you go into the deal realizing that it is the nature of the beast and just do your part to make it a smooth deal.
Of course all banks are different and you might not have to wait for anything, but it never hurts to be prepared for what’s coming at you.