It’s finally time to just make it go away. I’ve had this house on the market since July 2007 and haven’t received even one offer.
This all started back in 2007 when my family and I decided to rebuild and move into our rental property, as I explained in Housing Bubble Hits Home for the Stankavich Family blog post a few months back. The construction project made sense based on the property values back in 2006, but we all know things have changed since then.
We didn’t get in a hurry to sell because we still needed a place to live. So we didn’t get very aggressive on the pricing. As a result we ended up trailing the market all the way down to where we are today. After we had to drop the price below the amount owed, I just waited out the project to finish our new home, and now that that’s done, I need to get the best reasonable offer that I can and get it in front of the lenders. There is absolutely no way that I can afford both house payments – I’m completely tapped out from the overruns on the construction project.
I’ve been working with Dianne Yake from Easy Street Real Estate. This is the first time that either she or I have tried an auction, but we feel confident that we have prepared well, but we don’t really know what to expect. It should prove to be interesting. I found Richard Geller’s Mortgage Relief Formula website and ebook very helpful in learning more about short sales and auctions. We are pretty much following his recipe for our auction format.
I’ve got a website up at https://www.kwyk.net/bp for pre-registration. I’ll be adding code today to allow bids to be placed online and for registered bidders to be able to review the bidding history. If the website proves to be useful, I’ll pretty it up and extend it into a customizable service offering for others to use for their short sale auctions.
I’ll continue to blog about the auction and the short sale approval process. If you’re interested in hearing more about how this goes, you can subscribe to receive future posts by RSS feed or email.
Hello, my name is John, I just drove by your house today and talked with one of your neighbors whom had helpful positive feedback except that it is right next to a busy road. Needless to say I am interested and am wondering if you have received any offers? I know money seems to be tight for everyone right now including myself and wonder what price may work for the both of us. Any additional info would be great.
Mike Stankavich says
Hi John. Just go ahead and bid whatever you think is a fair price. We don’t have any bids in hand as of yet. I’ll have the bidding page up a little later this morning. Please note that we are requiring bidders to actually check in with us at the preview. I am at the preview along with the real estate agents, so feel free to drop by and ask me about any concerns that you have. I’ll do my best to give you the straight scoop.
As you can see from my story, the objective is to get whatever we can for my lenders in a tough market. And even if that’s quite a lot less than what I owe, that’s the way it goes, and the lenders will have to take the loss. Remember that you will need proof of funds or a preapproval letter to submit along with your offer if we select your bid.
Mike Stankavich says
To follow up on my comments with John, our format is that we will accept bids until 5:00 PM today (Sunday 4/5). At that time, we will contact all bidders, inform them of where they stand versus the high bid, and see if they would like to improve their position by raising their bid. We will continue to contact bidders until all but the high bidder have chosen not to raise their bid any further. At that time, we will ask the top bidders to submit formal offers based on their bid.
I will have a bidder page on the website at http://kwyk.com/bp. Registered bidders will be able to see a list of the bids at the web site whether or not they have placed a bid. So if you’re interested in how it plays out, go ahead and register.
My sense is that somebody is going to get a pretty sweet deal on this place. As long as we can get it past the lenders, that’s just fine with me, and I’ll be happy for them. It’s a really nice place, but it just didn’t meet our changing needs.
Best of luck mate! I am a realtor in New Zealand and just sold my own home by short Auction! I auction most of my clients properties because you may get a premium price and if not you get market price. It is important to “pitch” your property correctly. In my case, I homestaged,decluttered and tidied my home to an extreme level cost me $2000.00. I also exposed my property extensively for a short time(18 days from start till sale) I put a 3 x full page adverts in local property pages and had a great advert on 3 websites with a “video” (moving pics), proffesional photos, flyers etc All cost a further $2000. I was not a distressed vendor/seller but I communicated that I was very serious about establishing the free market price – what ever that may be. Most importantly due to my experience (been doin this for 21 yrs) I invited all bids from $600 000 which is a real bargain price! Please note I would not have sold my home for less than $825 000. Due to all above factors we really attracted a lot of buyers – some hoping to pick up a bargain and others also hoping to pick up a bargain but then getting real and also some who had to own it no matter what. The thing is I invested $4000.00 plus was in for a $25 000 commission payment but my property seriously stood out – ie it was real easy for buyers to find it and when they came to view it, the home was impeccable(huge pain for us to maintain) and we gave the purchasers an expensive “flyer and info pack”. The highest price achieved in my street was $715 000 but most properties sell for mid $500 000. On auction day there were 19 registered bidders, 9 actually bid and we achieved a sale price of $842 000!The market is seriously slow in NZ at present. A great result, a lot of effort and a $4000 marketing investment. May the free market prevail! Steve. If you want to contact me go to http://www.barfoot.co.nz go to find a branch and find Howick Branch – I am the manager. I am not trying to solicit business but would be happy to chat/help for free if you want.Good luck and G-d Bless.
Mike Stankavich says
Steve, thanks for dropping by. I’m glad to hear that you made the best of your situation.
We weren’t quite as aggressive on the promotion as you were, but we did have the property very clean and with all outstanding repair issues fixed. We didn’t get any strong bids the day of the auction, but it generated enough buzz to bring a very clean and appropriate offer which we have submitted for lender approval. Hopefully the approvals will come through without taking too terribly long.
Mike A says
Hope Everyting works out for you guys. Its tough times for so many right now, but you just have to hang in there and keep kicking at it, just they way you’re doing!
We’ll need to get together soon….
Good luck. Hopefully the market will start turning around.
Mike Stankavich says
Mike, Diesel, thanks for the encouragement. We submitted an offer to the lenders a couple weeks ago. Hopefully we’ll find out whether they will approve before too much longer.
I was wondering if you felt that Richard Geller’s information was worth purchasing to do my own short sale. My home was purchased in 2005 for 184 and we have had foreclosures in our townhome community to the tune of 105,000, so we are seriously underwater. Our zipcode is the hardest hit for foreclosures in the Atlanta area. I was also curious if after your short sale, you were able to get the lenders to put it as “unrated” on your credit reports and how much of a hit to your credit did you have to take? Also, were you able to negotiate debt forgiveness for the remainder of your loan. Since we are about 70000 or more underwater and do not see being able to break even for at least seven years, we cannot financially see staying here. Thanks for your story and any reply would be much appreciated.
Kelli in Decatur, Ga 30032
Mike Stankavich says
Kelli, thanks for your comment. I’m sorry to hear that you are also in a difficult situation.
I did feel that I got my money’s worth from buying Richard Geller’s info product. He offers a nice overview and a fair amount of detail about how to get a short sale done.
I ended up one for two with the lenders. The first mortgage holder forgave the shortfall and reported the debt paid charged off. The second mortgage holder would not release liability for the unpaid remainder. There was about 88k left on that one. After careful consideration, I ended up filing Chapter 7. In the process, I stopped paying all credit cards and payments on the old house for several months, so my credit is pretty beat up right now. But I really don’t care – I’ve had it with credit. We have the new house, picked up a car and a van off of craigslist for about 3k cash each, and just plan to do without credit for the foreseeable future. It would be nice to refinance the new house while rates are low, but I’ll just have to live with it.
Bottom line, you just won’t know what your lender(s) will do until you get an offer and send it through. Every lender and every sale is a little bit different. If you’re certain that you can’t afford to stay in the house, and you have somewhere else to go, I’d definitely go for the short sale. Just get the best offer that you can within a reasonable amount of time and submit it to the lenders. Richard Geller’s book gives a lot of detail about putting together the short sale package. You can and should always ask the lender to forgive/write off the shortage and report you as neutral or favorable to the bureaus. No guarantee that they will do it, but they probably WON’T do it unless you ask.
I’m far from an expert on this, but I’ve learned a lot along the way. I’m glad to share what I’ve learned with others in the same situation. Best of luck getting it all sorted out.