What am I missing? What is the thought process behind it all? What could possibly be the benefit, in a market where property values continue to decline, for a lender to reject a fair market offer on a short sale listing, and instead, choose foreclosure? I'm at a loss!
I have been negotiating deals, in one industry or another, for 30 years. I feel that I understand human nature, and can generally anticipate the next move, but I oftentimes find myself baffled by the short sale negotiation (or lack thereof). It leads me to believe that there's another game afoot; a sub-plot to the storyline. There has to be some hidden financial incentive for these financial institutions to avoid short selling, and embrace foreclosure, but for the life of me I can't see it.
I just spent the past eight months negotiating with Bank of America. We had a strong offer of $320k, which somehow took 6 months for the "investor" to approve. Six months...really? When the appraisal came back at $295k, the buyer submitted an addendum to correct the price, and again we waited. Yesterday, two months having past, I received an acceptance at $295k, with the caviat that the buyer agree to a $34k, no interest, promissory note, to be paid over 15 years "...to offset the losses" of the investor. Are you fucking kidding me? That's the best you could come up with after 8 months. Let me get this straight! You want the buyer to overpay by $34k on a house that has dropped 8% in value during the negotiation?
That's what I mean; they must know that the counter will be rejected (I'm not even sure that it's legal). That tells me that the entire process is a sham; that they decided on foreclosure long ago. But why? Explain it to me please!
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