Short-sale games banks playPosted: Updated:
PHOENIX -- Chris Caldron is living the American Dream. He got married not long ago and now he and his wife are looking to buy a home.
"We were very excited about it," Caldron said. "We had been looking for a long time and we've seen a lot that we like."
They fell in love with a house that was a short sale listed at just $149,000. Caldron and his wife put in their written offer and waited an entire month before they finally heard news that the bank holding the mortgage demanded more money.
"That's when we got back the counteroffer," Caldron said. "The counteroffer was for $160,000."
So, in the contract, Caldron offered the bank what they wanted, $160,000. It should have been a done deal, but then he waited another month to hear back.
"The bank decided they weren't really going to be satisfied anymore with $160,000," Caldron said. "Now they wanted $180,000. I said, 'Is this a joke?'"
"This is just blatant shenanigans that's documented," said Dean Wegner, a mortgage specialist and real estate agent in the Valley.
According to Wegner, banks love playing these kinds of games in order to minimize the loss that they're taking.
"The loss mitigators at these banks will do anything and they are paid on bonus so the more money that they can recoup, the more that they get paid," Wegner said.
But what about those written contracts? Can the bank really get away with this?
According to Wegner, "It's not legal, but how are you going to fight this? You have to go retain an attorney for $5,000, you have to quantify damages and then hope that you can recoup from a bank that has staff attorneys."
He said the banks are nothing more than bullies and Caldron agrees.
Although the bank eventually reduced its counteroffer down to $170,000, $20,000 more than the original asking price, Caldron said it's still higher than comparable homes in the area, not to mention he's wasted three months of his time waiting to hear from the bank.
"It's been incredibly frustrating to the point where I don't even know if we're going to continue looking for houses," Caldron said.
Keep in mind banks are taking a loss and want to make that loss as small as possible. They make that happen by dragging their feet, hoping prices inch up, and giving time for a buyer to outbid you.