Need Input, Negotiating W/Countrywide
Looking for your experience/advice dealing with Countrywide LM dept. My first one with this lender. Sent them a very complete SS Pkg. with lots of scary photos (junk cars and old appliances in yard, broken windows/doors, fire damage to garage roof trusses, water damage to ceilings, trashy neighbor, interstate highway abuts prop. line, etc., etc.), estimate of repairs from contractor, even had Coldwell Banker do a complete walk-through BPO. They got the package and immediately sent it to review because of sale date that was 14 days away. I thought that was a positive sign, as their SS pkg. cover letter says it always takes 2 to 3 weeks for review. My offer is all cash, no contingencies, fast close, upon their approval. Got a "courtesy call" from them today (sale is this Friday) politely declining my offer. I came in only $2,500 below the BPO. Upon questioning, they said they needed my "best and final offer", they "do not want to negotiate back and forth" (I can appreciate that, guessing they have a LOT of these to deal with), and that I needed to make an offer at FMV. I asked if they meant FMV as per my BPO, or some other determination. They told me they can't tell me how much or how they arrived at a FMV, but that they always have a BPO or appraisal done. According to the seller, this hasn't happened, so the most they may have is a driveby BPO. They did say to submit any new offer signed by seller (no problem, I have POA) with a new HUD1 as soon as possible if I wanted to make another offer.
If you are still with me, and have had experience with Countrywide, my question is this: What is your take on their response? Is this a standard negotiating ploy to extract the highest offer, or could they really care less if they go to sale? With the condition of the property, and the opening bid amount far above as-is FMV, it is the consensus on my end that they will positively be owning this one after the sale. I can go a little higher and still do well, looking for any advice as I prepare my "best and final offer". Do they really not negotiate, or is this their way of negotiating? Thanks for any input!
Increase offer to $1k and say I'm sorry but there's just no more money to be made on this deal, say your helping a friend of a friend but it's not that big of a deal for you to just walk, otherwise flowers, lunch, or golf should do the trick. Have you thought about having the city call the lender about who's going to pay for moving those junk cars?
Warning _ I have not done a SS so this is very general advice.
It sounds like they have to push back and are therefore not able to accept the initial offer.
Do you really want the deal? Is there really profit in the deal for you?
I woul either go back with a lower offer as it does not sound like they have another offer that they are willing to take.
Or, I would make a minor adjustment up so they can feel that they did their part in pushing for a higher price. Given the employee something so they can say they won and got the offer up a bit.
They do seem interested in working with you (the call back) but they seem to have 'their procedures'.
John
Thanks for the input. Update:
I re-submitted the offer at a higher amount yesterday. They did not call me back, I had to call them to find out they declined it as well. They again said if I was still interested to submit my "best and final offer". I told them that given the condition of the property, I was already at the end of my comfort level and higher numbers from me wouldn't make sense. They put me on hold, someone new came on the line and we basically had the same conversation over again. They declined to give me any clue as to what amount it would take to get this done. I did get the phone and extension for the REO dept., as that is likely where this will go next. I asked if the REO dept. uses different criteria than LM, she admitted that they do. BTW, the REO number I was given is: 805-520-5100 ext. 5207 in case anyone needs it.
Details for the curious: Opening bid at the sale will be about 175K. The BPO we ordered came in at 95K as-is, 179K if repaired, and we did not try to influence the broker to get this figure. Actually, we are confident that the broker was being cautious, and that the ARV will be in the 200-225K range. House is 3700sf, 3.5 baths, 3 fireplaces, two kitchens, and additional building on prop. for office or hobby shop. Repair estimate from contractor that we sent to Countrywide was for 60K. We let Countrywide know that borrowers tried to sell this property and couldn't; Property will not pass a building inspection and qualify for financing until much work is done. We offered 119K net to lender and quick close.
Having done rehabs for many years, I know I can repair this prop. for far less than a contractor would charge, but I don't do rehab anymore and would flip it to someone who does. We have a herd of investors here that love this kind of property and will pay well for them, fixers are hard to find. This would resell immediately as is at a min. of 160K. Not a huge net after costs but we'd be in and out in 30-60 days and have a nice ROI.
Additional twist: There is a private 2nd at 35K, he will take almost anything to release his interest, as he understands he is going to get nothing if it goes to sale.
We are wondering what it would take for Countrywide to make a logical decision, or if that is just not their policy. They are going to end up with this as an REO, then have holding costs and selling costs. If they are llucky, the local building inspector won't post the property for code violations with a "do not occupy" order until everything is brought up to code. It occurs to me that if their LM handles all these kind of properties this way, we all should be getting over to their REO department, where all these messes have been dumped. There may be some good deals there!
Thanks again for the input. On to the next one... unless C'wide is the lender!
I've had good experiences with Country Wide but they have so many negotiators so you might of drawn one of the evil ones .
I think they took a stance like the one they took with you because they knew the sale was nearing very soon.
I made a bid on a property that went this way. Mine was only the second bid they had received in 8 months. They wanted a higher bid. I gave a slightly higher one, and they still turned it down. So I just backed off. A month later, they were calling me, telling me they would accept my last offer if I was still intrested. I wasn't. I had other things going on. It set on the market an additional four months, and recently sold for $12,000 less than my final offer. Kinda ticked me off that I didn't get it, but at least THEY ended up on the losing side. The guy that did get it, lucked out.
Of course, it sounds like you really want the property, so you may have to play it their way.
Thanks for the responses, I appreciate the feedback.
Here is the update:
Spent day before yesterday talking to CWide, sent them offer of 141K, or about 88% of the principal balance. I thought that was a pretty decent offer for them. They said they had plenty of info on the value of the property, said again I would have to raise my offer. I politely declined, diplomatically told them it was not probable they would get any bidders at the opening bid of 173,534K (!!).
Turns out the borrowers had recently tried to put together financing for a relative to buy this. Their loan broker arranged an appraisal of 220K (no mention in the appraisal of the faults in the property, surprise!) which was sent to CW in an attempt to get a SS agreement (huh?? you owe 170+, send in a SS pkg., with a 220K appraisal, and want them to short?? Don't try this at home!).
This explains their attitude about the whole thing, although with all the photos and documentation I put together for them, one would think they might have taken a closer look at this one. I really wanted to help the borrowers avoid this foreclosure, but you can't win them all.
Bottom lline, no one bid at the sale today, and CWide now owns this thing. I am so tempted to call them back and say "told you so", but that probably wouldn't help my case if I end up dealing with any of these same people again.
I don't know how long it will take for this to show up in their REO Marketing Department, but I'm on it. Maybe they are more reasonable over there, or maybe I'm crazy to continue trying to deal with these guys. Let the games go on!