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14 Comments on Short Sale Buyers Should Try Putting Themselves in Short Sale Sellers Shoes
Chris, great post. I personally want to blame the banks for this dilema. I actually write quite a few short sale offers for my clients, and I must admit, we still keep looking and write offers on others as well. It is most unfortunate that the seller is dragged thru the mud on these, and I don't agree with it at all. However, at the same time, when I have a buyer in hand, and they are told after submitting an offer that it could be weeks and weeks before the bank approves the short sale, they turn to me and say they wish to keep looking.
So, I guess my point is, the banks just have too many bad loans and cannot handle all the short sales. They obviously need more help but I doubt if they are gonna get it.
I agree. The buyer needs to come with a deposit do their inspections and hope that bank approves the short sale. Many times they are getting a home under market value.
I don't think it is a valid contract without "consideration" and the EMD is just that. I think that VA Association of Realtors needs to step up and tell agents if a contract is ratified by the sellers then it is a ratified contract. The third party approval is just another step in the process. They can withdraw their offer and get their EMD back at any point prior to final signatures from the lender.
Chris Ann - I completely agree with you on this. And Cindy made a great point about "when" a contract is considered ratified in short sales. I believe the third party approval should be considered another contingency, therefore EMD is surrendered when the buyer and seller have come to a meeting of the minds on price and terms. However, the definition of short sale ratification is debatable and makes this type of transaction all the more lengthy and complicated.
Jean: The banks certainly do take their time, but is it unreasonable to expect to wait for 30-60 days?
Joe: They want the deal without waiting.
Cindy: That's just it. It's not about having that option to get it back. If the EMD must be deposited, then the buyers can't keep writing offers all over town. The buyers want their cake and eat it too.
Amy: It is really a tangled mess. The banks could solve the problem by working short sales more quickly and not leaving folks with horror stories of 6 months waiting for approval and nothing. I find those stories are the exception and not the rule, but still....buyers need to be accountable too.
Chris - If the agents who are working with buyers who are considering putting in an offer on short sales would educate them that while the approval can take some time from the lender, it should be looked upon as a typical resale in that the seller is the owner of the home and once a contract has been executed between the buyer and the seller the terms and contingencies agreed upon go forward with within the time lines (EMD, inspections, mortgage commitment, etc.) that have been set.
I agree that if a buyer is not in a position to hold up their end of the contract, then don't bother pursuing a short sale for a purchase.
Hi Chris Ann-I don't envy you dealing with this short sale business so much. Life can be stressful anyways but from everything I have heard short sales are very difficult. I give you a lot of credit for what you do. Have a great evening. <SMILE>
Chris Ann...
I see this from the buyer's side. I wouldn't want to tie up any money at all until I know that there is a deal struck. Sellers who need third party approval need to accept the fact that they don't have a strong negotiating position.
Chris Everyone is aware that short sales have their own difficulties and risks to buyers, sellers, listing and selling agent. In Virginia it is nothing more than a contingency to the contract. It is typically not voidable prior to the contingency deadline and typically voidable after the contingency deadline.
The buyer is at risk if
It is not a one way street and all parties to a short sale are at risk
Art Kruschka, Principal Broker, First Virginia Realty Management
Donna: Buyers really don't get that these are contracts they are entering. I ask my buyers up front if they are willing to wait on a short sale. If not, we don't even look at them.
Sharon: It gets to me from time to time. This is one of those times.
Richard: I used to feel the same as you. And normally, when I'm representing a seller, I don't see this as a big deal. But lately, writing offers is like playing the lottery in my market. It's getting maddening. For the sake of argument though, who really knows what is a "done deal." Normal deals are falling through these days too. If you want a house, you should be willing to put your money where your intentions are.
Art: Where's the real risk if Buyers have no skin in the game? I get that a contract is a contract and this is just a contingency. I've been preaching that for two years through my PWAR Short Sale Class. Wish all Buyers Agents got that a contract is a contract. They can fall through for virtually any reason.
Hi Chris Ann: It astounds me that some agents believe that short sales aren't a real transaction, like a short sale is a pretend transaction. It's a real transaction with all the bells and whistles and train stops as any other.
I make buyer's agents send me an email promising they will not write any more offers for their buyers while we are in contingency status. I've had a few agents refuse and, quite frankly, I'm not interested in working with those agents any more than my sellers are. Buyers need to put their money where their mouths are and if they aren't, then go buy from somebody else and quit wasting everybody's time.
Elizabeth: I have just seen a wave of bad buyers agents recently. And they wonder why their buyers don't end up BUYING houses.