Here in Arizona the competition for a Short Sale can be fierce.  The demand for low cost properties can create a multiple offer situation.  When representing the Seller, there have been 2 philosophies on how to manage multiple offers on a property.

First, the Seller accepts the highest and best offer and only that offer is presented to the bank.  All other offers are held in back-up position until the current Buyer withdraws, Buyer's offer is rejected by the bank, Buyer rejects bank's counter-offer or Buyer fails to qualify for financing.  In the case where a higher offer comes in after the original offer is presented to the bank, the higher offer is held by the Seller and remains in back-up positon until current Buyer is nullified for any of the previously mentioned reasons.

Second, the Seller continues to accept offers and turns all offers into the bank for acceptance or rejection.  A higher offer is submitted on grounds that the bank will cancel a lower offer without further notice.

The AAR Exclusive Right to Sell (Listing Contract) and the Short Sale Addendum to the Listing Contract can be interpreted to allow for either approach to handling Short Sale multiple offers.

I have found in order to keep the playing field fair, I am in favor of escrow being opened at the time of Seller acceptance as insurance for both Buyer and Seller to successfully close the sale.

Please share your experiences with both approaches.  I would like to weigh out the pros and cons of both to help determine the most affective.  Thank you in advance.

 

Someone once told me that having debt makes a person more responsible.  He felt that by increasing your debt you become more motivated to work and therefore are driven to succeed.  The larger the amount of debt you accumulate, the greater your chances for success.  He used the term debt lightly without defining the purpose.  Is debt  used for a personal or business neccessity or for a luxury item?  He continued to explain that the purpose we work is to provide perks, otherwise, there would be no purpose in getting out of bed in the morning.

I plan to get out of bed in the morning and continuing working at real estate even if I don't have any debt.  I simply, love my job.

. . .is someone who keeps you well informed of the ever changing mortgage incentives that the powers on high giveth and taketh away.  Bob Wasieko with Security Mortgage updated this morning the situation with the USDA Rural Housing loan program which has been available in the rural counties of Arizona.  This program has been an affective tool in stabalizing our rural economies.  For all those who are affected by the discontinuance of this program, here is the latest. . .

The Congress has failed to re-authorize funds for the USDA Rural Housing loan program....yet.  Thus, when the federal fiscal year ends on September 30th (next Wednesday) so will funding for this $0 down loan program. 
 
This happened last year too.  The reauthorization of the funding for Rural Housing was delayed and many of our lenders 'suspended' the funding of USDA RH loans until the new appropriations bill was passed..about two weeks late.  Other lenders continued funding USDA and simply held those closed loans on their books until USDA had funds available to offer loan guarantees again.  One of those lenders was Taylor Bean & Whitaker who as we all know, have gone to that great closing table in the sky.

We have high confidence that the worst case scenario will be a slight delay to some USDA RH fundings in October.  As a back up plan, we have identified lenders who are still accepting USDA RH loans today.  We'll monitor the situation and if need be, we'll move loans to lenders still accepting USDA RH loans. 

Thank you Bob for the info!
 

Would it be ludicrous to propose that losing the Ameridream down payment assistance program is not the end of the world?  Sure, it's an inventive way to provide Buyers with the opportunity to get into a home with little money out-of-pocket and the Seller does receive a charitable donation on his income tax return but the bottom line is does the program disable us in achieving what really needs to happen in order to improve our current economic condition?  First, Buyers need to return to sound financial budgeting practices and wean off of government programs and credit solicitors so they can develop financial security over a lifetime by establishing a savings plan.  Sellers, after paying contributions to Buyers, multiple mortgage payoffs and closing costs along with declining market values cannot sell their property for enough money to cover all their costs. Thus prolonging the recovery period because more and more homes are dumped on the market for less than what is owed.  It maybe preposterous to even think that the Seller needs relief to help stabilize our economy, as well.  Pulling the plug on Ameridream may help balance the scale in leveling the mindset of our nation by working together to improve our situation.

The best advise I ever received when dealing with the bank in negotiating a Short Sale is "Don't take NO for an answer".   "No" doesn't mean "no", it means not now.  There is always someone who will say "Yes". Even if it means recalling the Loss Mitigation Dept. immediately following a phone conversation with a representative that you got nowhere with.  Persistence, without obnoxiously bothering everyone who picks up the phone, will bring results. 

Occasionally, I hit a wall.  Then ask for the manager or the person who heads the department. 

Little tricks of the trade like dialing the 5 digit extension number changing the last number until a human actually talks to you. 

Then there are the out-sourcedcalls to India where the person on the other end is reading a script, takes all your loan information more than once just to torture you and then transfers you to Customer Service.  Refuse to give them the information and ask to be transferred directly to the Short Sale Dept.  I always compliment them for their fluent attempt at speaking English when I can actually understand what they are saying.

There have been incidents that there is no way around the systematic routine of going through several transfers before you find the person who can answer your questions.  Always pleasantly enjoying the experience, I ask questions along the way to help me understand that particular banks process because they are all different.  When I am interested in their job they are more apt to give me the information I need to help me with my job. 

Sometimes accidents happen. I was told by a colleague that one time he accidentally pushed option number 2 for Spanish speaking.  He decided to wait on the line and after telling the representative what his objective was he found he had actually connected to the only US based office that could easily connect him to the person he needed to talk to.  You just never know!

Please share your tips.  I would love to hear them.  I am always learning.

I went on a couple of Realtor Home Tours this week.  The tours were well-organized and very professionally run.  I was disappointed to see that only about 1/2 of those who sign-up for the tour actually attended.  I appreciated the ones that did.  This gives me the perfect opportunity to network with my fellow agents and glean ideas from them on how to use their fresh ideas to constantly improve my own business techniques.  Maybe no one on the tour had a buyer for any of the homes we visited but it provided both the agents and their clients valuable feedback about their properties and a chance to learn something new from each other.  Building relationships with our resource people can also serve to benefit Realtors by special offers, swift and loyal service, and a referral base.  Plus, the food was great!

This is how I see it. . .This is the time to seriously consider making a purchase.  The Feds are due to lower the prime interest rate on the 30th of this month to 5.25%.  It will take a couple of weeks for this change to effect the bond market which will in turn lower home mortgage rates.  The government is doing this to head off a major recession and stop the decline of home values.  When this rate is established the price of houses will begin to increase in value once again because monthly payments will become more affordable.  Already home builders in the Valley have discontinued their buyer incentive programs and have slightly raised the prices of their newly released models.  I hope you see where I'm going with this.  Now is the time to act.  While you still have some bargaining power as a buyer, I would consider making at least a $20K offer less than list price on a certain property.  I know you really like this home and that you would be happy with the purchase once you got moved in.  (This was addressed to my non-committal buyer who is waiting for the prime rock bottom time to buy) You will be on your way to building equity!

Let me know what you think out there in AR world!

I am always trying to keep up on the latest real estate marketing strategies.  My Managing Broker and I are working on a listing proposal that includes a Seller Concession being made with a full price offer up front as part as of the public remarks on the MLS profile sheet.  I have seen some of these promoted on the MLS in the Phoenix metro area as incentives to attract buyers.  They come in a variety of flavors.  Maybe the seller will pay the first year of HOA fees,  possibly the first few months mortgage payments or 3% towards closing costs. Sellers are willing to consent to these concessions with the hope of holding onto a higher than average list price and getting it!

In a market where bargain hunters abound, do you think these kinds of incentives are realistically figured into the bottom line by the buyer?  Can they see beyond the list price in bold print?  Tell me of your experiences with this marketing concept. 

I held an Open House today in a condominium complex in an highly trafficed upscale neighborhood of Scottsdale, Arizona.  Thinking Sunday afternoon was prime time, I had high expectations of drawing a crowd. To my dissmal dissappointment I only had one neighbor stop by.  He was one of the original owners, mind you these units were built in 1964.  Every neighborhood has one of these guys.  He stopped by to chew the fat, eat all the candy out of my candydish and clue me in on the real estate market trends.  First off, I had the property priced way to high (the seller dropped the price $40,000 off the original list price) and told me I would never sell it for that.  He continued to inform me that in todays market there were to many homes on the market and to few buyers who could qualify for a mortgage.  This situation would cause the value of homes to continue to plummet. After all, he was an expert because he had worked as a commercial mortgage lender (before he retired an eon ago).  Then he went on and on about his kids and their nearly perfect FICO scores. . .

Needless to say, I had a very uneventful afternoon.  One thing I have learned to do as a real estate professional is to respect the opinions of others and never discount them.  I thanked him kindly for his insight as he left with my last piece of candy. 

Who really got the sweeter piece today?

The answer to the question is:  I DID!  Later on that evening, I got a phone call from an agent who had an offer to fax over to me on the condo in Scottsdale.  The offer was higher than the last one I had received.   The buyer is putting up $5000 in earnest money, 20% down with a conventional loan and on a solidly backed LSR. It's a SWEET DEAL!

Mr. Rogers is welcome anytime at my Open Houses!

My heart goes out to those who have lost structures and damage to properties in the Southern California area fires.  I especially send my heart-felt thoughts to those who are amongst our ranks of Active Rainers.  The real estate agents, brokers, lenders, title agencies, home inspectors, handymen and the list goes on and on of those who depend on the real estate market for their livelihood. Please know that this Arizonian is a native Californian and is sad to see such devastation to my birth-land.  I truly feel your loss.