Short Sale Properties – Tough to postpone foreclosure

Here is another reason why this entire economy is in the mess that it’s in and further proof that it’s not getting better anytime soon (at least not from the real estate side):

We have a property that we are short selling that was set to foreclose at noon today. We started the postponement process last week and the negotiator for the lender completely ignored our emails, voicemails, and multiple requests for postponement.

We went over their head and went to their supervisor and then even their supervisor’s supervisor who FINALLY called us back today about 2 hours before the foreclosure time. After about a 1/2 hour argument with this individual I got him to take a look at some recent comps, photos, and a bunch of information about the property that I stayed up late compiling. He said he would take a look at it but wouldn’t make any promises.

Here’s the kicker — our offer for the property was at $140,000. Comps for the property showed about $130,000 market value. And do you know what the bank’s opening bid for the foreclosure was?

150k? No.
175k? No
200k? Keep going…
250k? Nope…
294k? Yes!

A property worth less than 130k with a 140k offer on it was supposed to be sold at a foreclosure auction on the Phoenix courthouse steps for $294,000??? And the bank thought this was a better idea than taking our offer?

It’s situations like this that make me totally understand why we are where we are today and why we will still be in this mess 3 years from now. If this property would have been foreclosed on the bank would have taken it back and ended up selling it down the road for probably about 100k, it would have added another property to the already hugely growing “Shadow Inventory” problem nationwide, the values of this neighborhood would have dropped due to another foreclosed property on the block, and the bank would lose even more money for it’s shareholders.

Luckily we got it postponed another 30 days due to our ridiculously large short sale comp package that we put together in order to save the deal. Now we’ll try to close this one before this foreclosure business starts up again.

But anyone who is looking for “logic”, or answers that “make sense” — don’t look at the current real estate market because those words don’t even exist!!

Related posts:

1. Foreclosure postponement
2. Short Sale or Foreclosure??
3. Another Strange Foreclosure Tale…
4. Can I short sell my investment properties?
5. Foreclosure mess grows!!!