If you do short sales for a living, you have to be patient and have a never-give-up attitude. Also, you have to celebrate the steps along the way. Here is a highlight from our office today, involving Litton Loan Servicing and getting them to do a second BPO.

On May 16th, Washington Foreclosure Assistance (that’s us) submitted a short sale package to Litton Loan Servicing. The trustee sale was scheduled for June 13th. We were immediately told that our offer at $256,000 was too low and they wouldn’t even consider it unless it was north of $290-295K.

Some people might be thrown off by the large difference in the offer we made and their response. I considered their response a success. If the bank tells you anything, that means that they are taking you seriously. We told them we would see what we could do.

The first step was to cut the fluff from the HUD. That brought up the offer by around $8,000. We sent the HUD and the new purchase and sale agreement in. They immediately rejected it and reiterated their minimum need of $290-295k.

At this point, we were getting close to the sale date, and we asked for a postponement. Litton, true to form, rejected that out of hand as well. I logged on to nwtrustee.com the next day, and sure enough, the auction had been postponed. Lesson to all: Don’t believe the Litton phone reps, just keep plugging away.

Now that I had evidence that Litton was working this file, even though they said they weren’t, that prompted me to go back to the buyer and let them know that we were still roughly $25,000 too low, but that we had some reasons to be optimistic.

Fortunately, the buyers were able to increase their offer by $8,000. We were now at a contract sales price of $272,000. Still, quite under Litton’s demand. We explained verbally to Litton that the buyer’s had loan docs in escrow and Litton would have their money almost immediately. We told them that the buyer’s lender had an appraisal done, showing the house value at $270,000. We said everything we could, but the Litton rep just said, “We can’t even look at your file until the price comes up.”

Most short sale processors would give up about now. You’ve offered more that you were prepared to, and you are still $20,000 apart. WASHFA, on the other hand, was just getting warmed up.

We knew that Litton hadn’t done an appraisal. They would have had to schedule it through us, and they hadn’t done that. Therefore, they were going off of a computer valuation or a BPO. My guess had been that if they did the BPO, it was by now a couple of months old. That was their point of weakness that we had to exploit. I ran fresh comps and it became clear that all ‘active’ properties in the neighborhood had reduced their asking price by at least 5% in the last 90 days.

I wrote up a “Net Proceeds at REO Sale” to show them what they would get if they rejected our offer, took it to auction, had it not sell, and then had to sell it as a bank-owned property. It factored in their holding costs, including eviction, property preservation, insurance, lost interest payments, days on market, closing costs and property taxes.

In the end, I created a range of Net Proceeds, based on 1) their original BPO, which I estimated at $295,000 and 2) the appraisal value of $270,000, and 3) their BPO minus 5%. I included the appraisal and the supporting comps as evidence. In an attempt to leave no stone unturned, I included a screen shot of the local sheriff’s sex offender database page, showing 11 sex offenders living in the zip code. Also, I included a screen shot of the nwtrustee.com website showing that the majority of upcoming foreclosures in this city were located in the subject properties zip code.

I wrote a clear, concise cover letter explaining our points, which boiled down to the fact that they should be grateful to be receiving an offer on this property, that they definitely don’t want to have in their portfolio in six months.

So, we sent all of that in a couple of weeks ago. We followed up with our contact the next day, and guess what they said? No. “We aren’t even going to look at your offer until it gets over $290-295k.”

I wasn’t undaunted. However, we backed off and gave this dish some time to simmer. That is all you can do, at this point. Our only next option, would be to stridently uplevel the matter through the ranks of supervisors, but in my opinion, since they had postponed the sale, I felt that on some level, they were going to find the time, on their schedule, to review our file, no matter how low it was.

Well, finally, the good part! Today, we get a call from our agent, informing us that a BPO was done today. That’s huge! That means that we convinced them to take a second look. The entire process has been them saying ‘no’, but, in the end, doing what we needed them to do. I love this business, and I can’t wait to call Litton tomorrow.

We would love it if you would share your positive experiences in the comment box below. Together we are more powerful.