Valley man warns other homebuyers about short salesPosted: Updated:
PHOENIX -- When it comes to stimulating the economy, are banks being stingy with their federal bailout money?
This is a hot button for a lot of viewers out there and that hot button has to do with short sales, which give a homeowner permission to sell a home for less than what that homeowner owes.
But, look what happened to Valley man when he tried to buy a short sale home.
When it comes to homes on the market, Jason Fritch says he's looked at a lot. In fact, 25 to be exact.
"There's always something wrong with it," Fritch said. "Either it has no appliances or the plumbing is ripped out."
But when Fritch's real estate agent showed him a home in central Phoenix, he said it was perfect.
"It was completely covered with trees and it had a big backyard for my three dogs and it had been kept up pretty well," Fritch said.
The good news is the home was a short sale and it was on the market for $160,000.
According to paperwork, Fritch offered the full asking price then waited for a response.
"I got a call from my Realtor saying, 'You got it! They accepted it. So go ahead and write your check out for escrow," Fritch said.
Fritch wrote a check for his down payment.
However, he claims when his appraisal came back showing the house was worth a lot more than what he was paying, the deal suddenly fell through and subsequently the house he was going to buy went back on the market for $210,000.
"Well, everyone wants these houses but to get them, it's difficult," said Dean Wegner, a real estate agent and mortgage broker.
Wegner said what happened to Fritch is common because he says banks try to mitigate their losses as much as possible.
As a result, people like Fritch get tangled up in the process and the glut of homes that are on the market remain on the market until the bank gets the best deal.
"If they can get a couple extra thousand dollars times thousands of homes, that helps their bottom line," Wegner said. "It's math."
As for Fritch, he's so disgusted he has stopped looking at homes and has a warning if you're thinking of buying a short sale or even a foreclosed home.
"They are willing to wait, they are greedy, they will wait for the market to come back around to hold on to these homes," Fritch said. I talked to the mortgage company who owns the mortgage and they say they are not to blame in any way for a couple of reasons.
One, they never approved the home to be sold for $160,000 to begin with because they always knew the home was worth more.
And, two, they claim they never accepted a bid of $160,000 and any confusion must be between Fritch and the Realtors in this case.
Regardless, just know that getting involved in a short sale or foreclosed home is always going to be more complicated than a regular real estate transaction.