The One Thing a Buyer's Agent Should Do BEFORE Showing a Northern Virginia Short Sale
My phone rings with Short Sale questions all day long. That's because I've established myself as a successful Northern Virginia Short Sale Agent. Yet, not all of the calls I receive are from potential Buyers ans Sellers. I'd say at least one third of the calls I receive with Short Sale questions come from my fellow Realtors®. One such call came yesterday from a very respected colleague. We'll call her Jan.
Jan had just gotten her Buyers under contract with a Northern Virginia Short Sale. And as requested by the Sellers in a counter offer, the Buyers had done the home inspection shortly after contract ratification. The Listing Agent was now requesting a copy of the home inspection and Jan thought 
was odd, especially since her Buyers had sent notice removing the home inspection contingency.
My first question in situations like this is, "Who is the Listing Agent?" Why? Just as some agents have established themselves as successful Northern Virginia Short Sale Agents, others have established reputations in this field on the far end of the spectrum. Jan told me his name. We'll call him Carl. Jan continued as my brain thrashed on why Carl's name was familiar to me. Then Jan said something about Carl needing the home inspection to justify the contract price to the bank. Suddenly, I knew where I had encountered Carl. I asked Jan for the property address. When she gave it to me, I recited what had stuck out to me in Carl's agent remarks. "Bank approved at $300,000, but will present reasonable offer." That was odd to me because Carl had the property priced at $260,000.
I had Buyers who had been interested in this particular listing and when I called Carl I asked how he got the bank approved price. Had he lost a prior contract shortly before the approval letter came through? No. Carl had a HAFA Approved Short Sale. This means the bank sets the minimum price they will accept after an appraisal, not a BPO. After hearing that, I knew it wasn't worth my Buyers' time. Not only have I been in situations where I had a HAFA Approved Short Sale that was beyond what a buyer would pay, it was impossible to prove that to the bank. The Sellers would have to agree to a traditional Short Sale. Problem with that is that the Sellers have already seen that HAFA Approval Letter which likely offers them $3,000 in relocation assistance. Try convincing a Seller to give that up prior to the end of the 120 HAFA marketing period.
I explained all of this to Jan, and told her that was the very reason I did not take my Buyers through this listing. It was not likely to be approved. Well, it was already approved, but beyond my Buyers' qualification and beyond what Buyers' seeing it online thought it was worth. And I found that out by asking Carl where he came up with that price. Problem here was Jan didn't. And now her Buyers were stuck on a property they were likely never going to get.
Buyer's Agents should ALWAYS probe for as much information as possible on a Northern Virginia Short Sale BEFORE showing it....especially if the Listing Agent claims to have an approved price. You want to know where that came from. And if the approved price is less than the list price on a HAFA Short Sale...well...wad up that listing and throw it in the trash. The Listing Agent has no clue how the HAFA program works. It's HAFA's price or foreclosure.
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