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Short Sale Tip: Writing and Receiving Offers

By
Real Estate Broker/Owner with Broadpoint Properties Cal BRE #01324959

In the state of California, we have all sorts of rules and forms that we can use for our short sale transactions which makes it a little bit easier on the agents when both presenting and receiving short sale offers.

When writing an offer on a short sale, make sure to write the offer as "clean" as possible. By clean, I mean two things: 1) make it physically easy to read (it will be faxed about a zillion times over the course of the transaction), and 2) make it as "clean" or uncomplicated as possible. Most banks would prefer not to pay septic, pest control, home warranty. So, buyers with "cleaner" offers will have a much better chance of getting their offers approved by the bank.

Include an SSA (Short Sale Addendum). If you are unfamiliar with this CAR form, get familiar. This form is used to state when the buyer will require lien holder approval, when the buyers will begin their inspection period, what will happen to the initial deposit, etc. It is a great form for addressing some of the uncertainties in the short sale transaction.

As a listing agent, I would check to see the dates and time periods that the buyer requests on the SSA. If there are multiple offers on the property, I would help my client to identify the strongest offer--the "cleanest" one--a buyer who is, perhaps, willing to wait and also willing to open escrow. (As an aside, I would look more towards conventional and cash offers. Since I know that FHA and VA loans have certain requirements and fees that the seller's bank may not approve, a transaction with an FHA or VA loan may be more difficult to get closed.)

Short sales are tricky transactions that require the agents to be extremely attentive to all of the terms and conditions of the contract--perhaps even more so than ever before. But, working these deals is also a great opportunity to do just that--familiarize yourself with all of the text of the contracts. Since we position ourselves as experts in the field, it is important to be familiar with the ins and outs of these transactions.

Broker, Realtor®

 

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Comments(7)

Gene Riemenschneider
Home Point Real Estate - Brentwood, CA
Turning Houses into Homes

Very Good Post.  Please send me more information on your company.

May 30, 2009 07:53 AM
Pat Champion
John Roberts Realty - Eustis, FL
Call the "CHAMPION" for all your real estate needs

Excellent tips on succeeding with short sales.

May 30, 2009 09:35 AM
Mara Hawks
First Realty Auburn - Auburn, AL
Inactive-2012 REALTOR - Homes for Sale Auburn Real Estate, AL

I just began the process of a short sale (not having succeeded before), so appreciate reading these helpful tips. thank you!

May 30, 2009 09:37 AM
Dianne Hicks
Realty ONE Group - Poway, CA

Great tips, I agree.... when writing contracts with strengths does make a difference. I also add an addendum to make sure they move status from active to backup if they accept my offer. I know they are suppose to but so many don't, this just gives a little stonger reminder. That way they don't get as tempted with additional offers after they have accepted mine!

May 30, 2009 10:14 AM
Satar Naghshineh
Satar - Amiri Property and Financial Services Corp. - Irvine, CA

I would recommend asking for closing costs and all other costs on the HUD-1, such as termite and home warranty. Even though Home warranty and termite get shot down 95% of the time, you can use them as negotiation tools. Keep in mind, the more you negotiate for the buyers, the more motivated they are to stay with you and close. I also tend to stay away from FHA unless they have a FHA broker that can close in 21 days, the property will be FHA approved and they have a lot more cash reserves than the 3.5% they are putting down. I want the buyers to pay my commissions and help out my sellers and the buyers can't do it if they are broke!

 

May 31, 2009 09:21 AM
Laurie Clark
Realty Professionals Heartland - Lee's Summit, MO

I just want to know what 3rd pary SS negotiators have a good contact with CW SS department that can get these deals closed in a timely manner verses doing it as agent ourselves and waiting the undetermined months for approval. : ) 

Jun 27, 2009 07:19 AM
Melissa Zavala
Broadpoint Properties - Escondido, CA
Broker, Escondido Real Estate, San Diego County

Laurie: That is a good question. Most legitimate 3rd part negotiators have closed hundreds of deals and have contacts with upper management at most of the larger financial institutions. At least, I know that I do.

Jun 28, 2009 02:07 PM