Is the bank trying to torpedo my deal?

[Michael Paul Eau Claire]

I have a buyer with an accepted offer on a property. It is a short sale, so of course the bank has the final word on whether the deal can go through.

The BPO came in at $20k (10%) higher than the offer, which has been accepted by the seller. The listing agent says the bank will not budge on that price.

Listing agent states if the deal doesn't close, the house will go into foreclosure.

Are others seeing banks take hardball tactics like this in these market conditions? Do you think the bank is bluffing to try to get another few thousand out of my buyers?

In these situations, is it more common for the seller and lender just figure out some alternate financing for the deficiency?

Interested to hear input from other areas of the country, as we are dealing with a nationwide megabank.

[gregharaksin]

I closed my first short sale recently. After 3 months of waiting, the bank said we weren't close enough to the appraisal. My buyer wasn't going to budge on price. so, we told the bank that, and sent them the reo listing down the street that just closed for $25,000 less than our offer. That worked.

I'm in escrow on an REO right now. It was a short sale listings a couple of months ago. They had a strong $450,000 offer that the bank refused. My client is purchasing it for $340,000.

Maybe the blame is with the people doing the BPOs.

[Michael Paul Eau Claire]

It was listed near the BPO amount for over 3 months and didn't sell.

Our offer was equal to the assessed value, which is fairly accurate in this part of the world.

The listing agent also states that the bank may torpedo the deal and let it go into foreclosure because the brunt of the loss will be carried by the PMI company. Anyone who can explain that to me wins a toaster.

:-\

[Michael Paul Eau Claire]

Maybe the blame is with the people doing the BPOs.

I can't argue with that...although your example is much more extreme than mine!

[Portland Real Estate Guy]

Some BPO agents dont know what the BPO is for. They might be trying to get the best price possible. Even with that said, in a short sale situation some banks will exept offers at 75% of the BPO. Just FYI most short sales wont close. I just got a REO listing priced at 410k; it went pending within a week. The buyers I'm working with tried to buy this home when it was a short sale and priced at $465. Why the bank didnt close during the short sale process for much more money and less the costs of doing a foreclosure, is a mystery.

[Michael Paul Eau Claire]

Things are looking better today. I have a feeling the listing agent is working out a loan so the seller can pay off the deficiency. The buyers made a $2000 concession as well. Fingers are crossed!

[GetSmart]

what lender are you referring to. offers not accepted are due to the lender, most lenders are nothing more than servicers. it all comes down to who the investor is backing the loan. the loss mit reps you speak with might have 10 different short sale guidelines on 10 different loans.

fannie maes i and va's n my opinion are the hardest to deal with.

[Dallas Broker]

varies in dallas, tx. I've worked with some banks who are firm with negotiations and will let property go into foreclosure. Most are willing to make something work as long as offer is reasonable and benefit of accepting less than par contract outweighs cost of foreclosure.

[GetSmart]

varies in dallas, tx. I've worked with some banks who are firm with negotiations and will let property go into foreclosure.

let me clarify, its not the banks that are standing firm its the investors who's money the banks are servicing. like cw, i think they are the biggest servicer but they have different rules and guidelines they have to follow in order to approve short sales.