How to sabotage a short sale?

Question

I have my eye on a house I want for myself.  It is a SS in foreclosure but I am being frozen out of the deal by the listing agent trying to sell very low to her friend. 
I am willing to pay more but she won't accept my offer.  House is vacant and I can't find the HO.
The house is very close to going to auction and because of the numbers, it would actually be a better deal to buy the first mortgage at auction and wipe out the 2nd.  The lender has postponed the auction once already.
What can I do to help insure that the SS is not approved so the lenders goes ahead and goes to auction?

Eric M. · Answer

Yeah I know.  I'd love to buy the HELOC and then control the SS but B of A ain't selling one note.

Daniel Bruckner · Answer

Here's an option:
          
          Sometimes when the homeowner, agent or like-minded individual is not wanting to work out a viable option, you can attempt to purchase the note directly from the bank and then you are in full control of the lien, offers coming in and the foreclosure process.  If you haven't purchased notes before, I would suggest that you work with someone who has.
          
          Many times this is a better way to go on properties that aren't agreeing with you on a short.

Remember though, it is still a negotiation game with the A/M on getting it at a level that fits your cash buy criteria
          
          Let me know how this goes.
          
          DB

Eric M. · Answer

Sure, I remember you Steve.  I have been out of short sales for some time.  Been doing alot of Hard Money lending in Chicago.  I like being on the lending side rather than the investing side.
I still know my way around SS a bit but much has changed in 2 years. This is St Joe County.
Since my first post I have dug up some good info and used my old contacts to talk my way all the way to the loss mit who gave me even more info.
I think I am in good position to get my offer in and head off any other deals; and with some luck, I'll be in the house with a little summer left.  However, this is CW so maybe that will be NEXT summer!

Steve Londeau · Answer

Eric,

Minna is right, and I think you know that's the case. You just need to wait it out. I would watch for the auction and try to buy it then. Then you file your affidavit of abandonment and you can have the property in about 45 days from auction.

Also, Steve is correct. See if you can find out the attorney. If you have a public notice posting, it has all the info you need. You COULD submit an offer right to the attorney's office if you really want to play hardball. Trott & Trott (my former employer and the largest foreclosure firm in the state) has a Loss Mit department now, and also might even give you information on when the auction is being held.

I live in a rural county, mind telling me what county its in? Also, remember me? We talked a bit a couple of years ago. We should chat again. I have a lot of interesting things going on that you might be interested to hear about!

Steve Babiak · Answer

Not sure if this will help or not, but if there is an attorney performing the foreclosure for the lender, then you might be able to persuade the attorney that at auction you will bid more than the short sale price they are looking at.  The attorney could then take that back to the lender to let them measure where their loss will be lowest.

Minna Reid · Answer

You really have no control over this. Just wait and see what happens. You can try to call the bank but they wont talk to you about the loan without an  authorization. 
Honestly the furthest youd get is customer service and you know what: they just don't care about your situation. They all just want to push their papers around and follow their processes and do what needs to get done to check out at the end of the day. Even if they wanted to they cant agree to sell to you unless the owner does so nothing you do will stop this now.
If the seller has accepted an offer both parties are bound to it and the bank can put their stamp on it or not. Theres just not much you can do here. Maybe the short wont work out, or the bank will want more than the buyer will pay and then they'll need a new buyer. Just let the realtor know you're still interested or put in a back up offer. If she can't sell the property to her friend, she'll still be needing a buyer, and the owner will still need to sell.

Eric M. · Answer

I don't understand the childish games comment.  I think I am being pretty pragmatic about the whole deal.
To me it would be childish to run and tattle to the agent's broker or whine that they weren't taking my offer.  The Realtor's legal requirement is only to submit my offer to the seller, not to the bank.  For all I know the seller is in on the deal too and may be getting a kickback.  So it is not clear that the Realtor is doing anything wrong.  To me this is just the way RE business is done and that is fine with me.  I don't hold any ill will toward the Realtor or the other buyer since they just want a good deal for themselves.
My goal is simply to buy the house.  So to compete with the trickery going on, I have to be smarter and work around them.
So it seems my best bet is to influence the lender to go to auction instead of accepting the short sale.  (since I can pay cash at the auction and the other buyer can't) 
I am just looking for ways to do that.  I don't see what is childish about that.
Wouldn't it be childish to say "oh, I don't want to live beside the big bad realtor, so I don't want the house anymore."?

Eric M. · Answer

I don't know that, never said I did.  But I do know some things.
          #1- In Michigan very few people ever buy at auction because of the 6 month redemption.
          #2- Most people are not aware that under certain circumstances the 6 month redemption can be reduced to 1 month.
          #3 In Michigan, lately, almost no one buys at auction because of #1 AND because nearly every loan is under water so the value is less that the auction amount.
          #4- Few buyers have the cash to buy a 500,000 house at auction and potentially tie the cash up for 6 months.
          #5- This is a rural county of vacation homes which makes 1,2, 3,and 4 all the more important.  Cash flow investors don't invest here.
          #6- I have the ability to pay more for the house since I am an end-user, not an investor who needs a profit margin.
          #7- If someone bids against me, at least at that point I have some control over the situation.  I can choose to bid or not.  The process is fair and in the open.  I can live with that, no matter the result.

What I don't know is how to influence the lender to go to auction.  That is why I asked.

Josh Green · Answer

what makes you think that nobody else will show up to the auction to outbid you?

Nick J. · Answer

oh............I didn't know you were playing childish games for childish reasons. I thought you were sincere in your efforts to purchase a residence.

why would you want to live on the other side of the agent/broker?

Sounds like a bunch of Jerry Springer action taking place. I imagine you'll waste a lot of your time and effort but apparently that IS your goal.