GDoN Revisited by Hipchickindc

In real life, hipchickindc is licensed as a real estate broker in the District of Columbia, and as a real estate salesperson in Maryland. Unless specifically noted, neither she nor the company that she is affiliated with represented any of the parties or were directly involved in the transaction reported below. Unless otherwise noted, the source of information is Metropolitan Regional Information Systems (MRIS), which is the local multiple listing system. Information is deemed reliable but not guaranteed.

Featured Properties: 1344 Taylor St NW

Original List Price: $675,000.

List Price at Contract: $499,000.

List Date: 10/19/2009

Days on Market: 134

Settled Sales Price: $517,500.

Settlement Date: 03/25/2010

Seller Subsidy: $12,500.

Bank Owned?: No, but is listed as a short sale

Type Of Financing: FHA

Original GDoN Post is: here.

Listing is: here.

I’ve had a few requests to do a Good Deal or Not Revisited (GDoN-R) on 3600 13th St NW, which is that huge detached single family house at 13th and Otis. Someone noticed a “SOLD” sign on it this week. I touched base with the listing agent, Denise Champion, and she says they should be headed to settlement this week. If it happens, I promise I’ll do that one next week.

Today’s GDoN-R is one of few short sales that I’ve seen come to fruition in DC. They are all over the suburbs, but make up a very small percentage of our inventory downtown. I’ve posted in the past about short sales, but for anybody who is not familiar with the concept, it means that the owner of the property owes more to their mortgage lender than the current market value of the property. When a prospective purchaser writes an offer, it is technically ratified between the purchaser and the seller, however, there is a contingency for a “third party approval”. Depending on who that third party is, whether there is a second trust on the property, and whether the moon and stars are in correct alignment, these things can take many months to move forward. Often, by the time the bank has approved a short sale, the buyer has chosen to move on to another property. In any case, for all parties involved, it is an exercise in patience (or futility…I had a property under contract as a short sale, only to find out that the foreclosure had already gone through, despite the seller having had ongoing communication with a short sale negotiator. The buyer was heart broken. After months of attempting to contact the trustee and REO execs at the bank, we ended up catching the foreclosure immediately upon being listed and fortunately had a sympathetic listing agent involved. The buyer should go to settlement next week.) Continues after the jump.

In this case, the listing comments mention that the “short sale is almost approved”. This indicates that there probably was an initial contract but that the original buyer didn’t want to wait around. That set the stage for the next buyer, who was able to take advantage of the approval already in progress. Most banks have not been willing to even consider looking at paperwork for a potential short sale before there is a contract in hand. There was recent legislation passed that affects banks who are participating in the Home Affordable Modification Program (HAMP). Those banks are now supposed to respond to listing agents within a specified period of time, before the property even goes on the market. With the amount of backlog being reported, it’ll be interesting to see how readily these changes take place.