About six months ago my wife and I decided to look into getting a condo for vacation rental here on the North shore of Kauai. Got a good agent, and did lots of looking around. then zeroed in on a unit that really stood out above the rest available in the Princeville area. Its in a small complex with little turnover. And it was a short sale, so possibly a good price.
The story was that it had been for sale for well over six months and there had been an offer under consideration for six month. Well when the bank finally did decide to accept the offer the buyers had all ready found another deal that they went for. So it was just back on the market for three days when we saw it. We put in a full asking price offer the next day. only to be told that another offer had come in before ours. So ours then became a backup offer.
Here is where it gets strange. In a short sale it seems that the seller only forwards one offer to the bank for consideration. the other offers don't even get looked at by the bank that is holding the morgage. What is that about?
Well we were told that the other offer was strong and the buyers were just standing by waiting for the bank to make up its mind. And they were definatly going thru with the deal.
So our search continued. Then another unit in the same complex came on the market. This one was for sale by owner ( not a short sale) in turn key condition.
Nicer condition that the short sale unit but almost $100K higher price for the same floor plan. We had to swallow hard on the price jump but went for it. there was some back and forth till we came to an acceptable price reached. Now we are in the process of closing on the deal. We are happy with the unit and think it will do well as a vacation rental.
While we were just into the negotiations with the seller. Word came in that the other unit (the short sale) had closed. And, get this, it closed for almost $15k less than our offer had been.
WTF. I guess that it wouldn't have mattered if we had offered $50k more, if the bank only looks at one offer. Whats wrong with the bank, willing to take what ever the seller forwards to them, without even looking at other offers? This process seems seriously flawed to me. this is a bank that recieved over FIFTY BILLION DOLLARS in bailout funds from us thru the largess of our government. And cant be bothered to look at all the offers on a property they are selling at a loss? Really WTF? I just don't get it! Any insight here?
We did end up getting a very nice unit, and a good old friend from the Big Island is coming over to be our first guest just days after closing. So we are off to a good start. And do plan to offer a PP BBS discount to attract like minded visitors. More on that once we get the listing site up and running.
But I really just need to vent a bit about this short sale process, and the banks still managing to blow it so badly. And now back to our regular programing. thanks for listening.
Cheers Richard