Buying or Selling a Home/Buying a home via short sale
Back in June my wife and I made an offer on a short sale. The house was listed for 349,900 and we offered 320 with 10k buyers help. We just received a counter offer on 10/30 of full price with on help. The logic was that the market has improved and that the house was appraised for more than 349,900. What we are upset about is that the lender took their good time to make a counter offer and used the benefit of the market getting better to their advantage. Is there any recourse we can take here or are we stuck with their counter? From the beginning we were under the impression that buying a short sale would take time however would net us a good "deal" in the long run. Obviously it does not seem to be playing out that way and we want to make sure we aren't missing any opportunities as we did not budget for full price with no help. We have discussed with our agent but another opinion would be greatly appreciated! Thank you!
Thank you for your very good question! Waiting on the lender to make a decision can be stressful to begin with. Then to get what one would consider to be bad news is even more disheartening. I'm sorry to read it's working out this way for you...The small upside is that they countered you instead of just telling you no. You're still in 'the game'.
A quick history, if you're not already familiar with it - Short sales have always been around. They just got to be more common place over the past 6 years. As time has gone by not only have the buyers and their agents become more savvy about what constitutes a good deal, so has the lenders. AND, now that there are by far fewer of them than there was a few years ago, and the housing market is on the rise instead of the continual downhill slide, lenders are being much more strategic in their pricing - versus hounding the homeowners for paperwork!
As you know, I am a Realtor in California so I cannot speak to your housing market in DE. Please allow for this as I speak in general terms. YES! It is REALLY bad the lender strung things out this far. Fortunately, the gov't has stepped in and given them time limits on each step of the process. Unfortunately, that can still mean months to the homeowner trying to move on -and- the prospective buyer. These are the questions / concerns I suggest are looked at, if they haven't been already:
* Your agent provide you with up to date comparables to ensure you and your wife are confident the current asking price is appropriate and/or still a good deal.
* Now the lender has settled on a dollar amount it will be easier for the next buyer to step in and the home can be snatched up quicker if it goes back on the market. What is the current length of time on the market for similar homes? If it is a short time and if there is a high amount of competition for the homes -and- you and your wife really like it, you may want to pay full asking price and your own closing costs, IF you can. If homes are lingering and the lender will be struggling to get a new buyer, you have leverage.
* The real bottom-line is: Can you afford the home at the full price without the 10k back? If you cannot, there isn't any question -- you should counter the lender reiterating your request for the money. What's the worst thing that could happen? If you don't make the counter you'll lose out. If they say no, then you're in the same position. Again, if homes are sitting on the market a little while you'll have a better chance of the lender wanting to wrap this up and give you what you need.
* If you can afford the loan but absolutely can't make the closing costs without, say at least 5k back, then, making a counter offer for that would be an option.
As you are painfully aware at this point, there is one other option - move on. Of course, I'd wait until countering...Just be emotionally prepared to have it denied. AND, keep looking! You may find something else you like. Until the lender accepts your counter to theirs there isn't a ratified contract. You are free to go into contract elsewhere and withdraw from the short sale prior to the lender's response. The listing agent won't be happy. Unfortunately, that's the risk they take when 'doing' a short sale.
Hopefully, this second opinion matches up with your Realtor's. Best wishes to you and your wife, Andrew. Hang in there! The hunt will be worth it in the long run!