Yay,
Showings and Offers!
You get
showings, and now an offer comes in. GREAT! How do I think offers on short
sales should be handled? Like any other sale.
Present
all in a timely manner. Encourage your seller to make a decision asap. If they like the offer, have them sign the contract.
We require all contracts to be on the Far/Bar As-Is contract along with the
Short Sale Addendum. We also require a bank letter of funds available or a
pre-approval letter and a copy of the buyer’s escrow check.
What’s
next? First of all, stop taking other offers! After the buyer and seller have
agreed the property is now for all intents and purposes PENDING. Yes, there is
a third party approval required but that DOES NOT mean
that you do not have a CONTRACT. You do. I’m sorry to go off a little here but
this one of my pet peeves. We have buyers write up all of the time to hear
weird things like the following:
1)
Our seller isn’t going to sign – it’s up to the bank
2)
The seller has already accepted 4 other offers, they’re waiting on the bank to
respond
3)
They accepted another offer last week
ETC.
My response to each:
1) Then
we don’t have a deal. I will continue to look for homes for my buyer. This
obviously makes no sense. The contract is between the buyer and the seller –
the bank is a third party approver only. Most banks won’t even look at a file
unless all documents are correct and signed/dated and still within timeframes.
2)
Why would you obligate your seller to sell his/her property 4 times? Again, I’m
going to find my customer something else. This is a waste of time. I get what
the agent is trying to do. For lack of better terms, ‘have their cake and eat
it too’. If one buyer gets tired of waiting, they’ll have possibly 3 more in
line. I get that but it is not done correctly. You can have one offer you are
working on and 3 back up offers but not 4 contracts on the same house. That’s
utterly ridiculous.
3)
Really, then WHY is it not marked pending or active contingent short sale
(that’s our MLS’s new rules for short sales that have been agreed on (under
contract) but are waiting on bank approval)?
Listing agents: If you want to
play the multiple offer game that is fine. I realize you want your seller to go
with the most likely offer to get accepted and be able to close. That’s a
no-brainer. But you have to disclosure what you are doing. Like many bank owned
listings, they’ll say “We will be accepting offers for 5 days before we’ll get
an answer from the bank. At that point the bank will most likely ask for
everyone’s ‘highest and best offer’.” My response: GREAT, here’s my buyers
offer. It expires in 6 days. At least they know what they are doing. That makes
sense!
We look forward to working with
the other professional real estate agencies on short sales and the many buyers
and sellers as well.
Yours in Success,
Susan Milner
Florida Future Realty, Inc.
888-764-6665 toll free
239-542-8521 local
To read the entire 4 part article: Short Sales
Copyright 2008 Susan Milner
Yours in Success,
Susan Milner
Florida Future Realty, Inc
http://www.YouTube.com/FloridaFuture
(239) 542-8521
Susan@SusanMilner.com
We also handle Cape Coral Short Sales......
copyright 2008-2012 Susan Milner of Florida Future Realty Inc
My advice? Avoid short sales all together. Only 1 in 24 in the state of California actually even get approved by a bank. It seems like if someone is interested in a short sale property, my advice would be to wait until it goes into foreclosure. It will typically be relisted at a better price anyway. And although REOs are no picnic either, in my experience, they're easier on the buyer and everyone concerned, then a short sale. And an added bonus- at least you are typically guaranteed a commission for all your hard work if the deal closes.
Hi Paul,
Thanks for stopping by. I of course, disagree with you. In my experience we are MORE in control of short sales than bank owned properties. When we list a bank owned property we are dealing with a third party company that gets in between. They ask us to do everything from clean outs, to rekeys, to putting the utilities in our name, lawn care, pool care, ETC. Then they offer a 5% commission to be split as follows: 3% to selling agent and 2% to listing agent - with the listing agent giving back a referral fee of 20-30% to the bank. That's insane.
When I sell a short sale I have fought for 6% commission on all but 2 so far. Those were 5% split 50/50 with the selling agents.
Just my 2 cents on OUR part of each.
Now onto the buyer side: IF (yes, that is a BIG IF) the listing agent is competant or has hired someone competant to handle the short sale negotiations, it will close. The buyer may have to wait an extra 10-15 days but it will close.
Read through some of my other blogs with more details on short sales. Good luck and thanks again for your comment!
Paul,
I would also have to disagree with you on the effectiveness of short sales. In my wife's RE office (Central Ohio), almost all short sales have been approved and with commissions to boot. The banks are getting better and/or more resources and IF done right, they serve as an alternative source of reducing inventory over foreclosure. Short sales have accounted for about 30% of all sales this year in her office, thus they have been an important source of business.
You of course neglect to say that the contract is not a contract with the lender. They do not sign nor live up to the time tables of the terms of the "contract". Plus they will require the buyer to pay doc stamps on the entire amount owed by the seller not just the sales price. Did you forget or just did not know about this Susan? Expert. I doubt it.
You of course neglect to say that the contract is not a contract with the lender. They do not sign nor live up to the time tables of the terms of the "contract". Plus they will require the buyer to pay doc stamps on the entire amount owed by the seller not just the sales price. Did you forget or just did not know about this Susan? Expert. I doubt it.
"John",
First of all, I know who you are so you might want to stop leaving random anonymous comments in the middle of the night. If you are truly concerned, why not login to your account and leave your real name.
But just so others know, the bank (seller's lender) acts as the seller at closing and they will pay doc stamps or require the seller to.
The buyer is not responsible for paying doc stamps on a sale in Florida (but anything is negotiable). You should know that "John" you have 23 years of experience (per your email).