The Myth of Short Sale Sellers Vanishing into the Night
Another day, another lesson I find myself giving a Buyer's Agent in the Northern Virginia market on Short Sales. By now, I would think that all of us in this business understand that a Short Sale is only different from a regular sale in that the Seller's must get bank approval on short payoff of mortgage balances. That's it. It's the same type of contingency that a buyer has with their financing. If the bank doesn't say yes, it's no deal.
So as a buyer, how would you feel if you went to a seller and made a great offer on their home and the sellers said that they wouldn't sign it or take their home off the market until your financing contingency was removed? You'd feel pretty upset. After all, there is a leap of faith on both sides that the parties are going to do what they say they are going to do in the offer.
Part of a seller trusting a buyer is that the buyer puts up an earnest money deposit. It's money tied to the contract that assures the seller that the buyer is going to follow through on the loan process, etc. In Short Sales, somehow buyers think they don't need to put up that earnest money until Short Sale Approval. The excuse is always the same from the Buyer's Agents. "We don't want to have money tied up in a transaction and if the banks don't approve it, your sellers vanish into thin air and won't sign a release."
I have represented a lot of Short Sale Sellers since 2007. Not all the deals were approved. And you know what? None...not one of my Short Sale sellers vanished and was unable to sign a release of the deposit back to the buyers. What that sentence, uttered by yet another Buyer's Agent today translates to in my head is this, "We're going to be looking at other homes while you are working on getting Short Sale Approval, so the buyers would like the money liquid. That way they can bail on your seller with no drama."
If you expect one of my Short Sale sellers to accept your offer, you better start by understanding that most Short Sales fall through because buyers flake out. And when you don't put your money where you're mouth is as a buyer, you are announcing that you are a flake. Sorry. There's no other way to say it.
Buyers who can't stomach the idea of waiting for Short Sale Approval shouldn't be making offers on Short Sales. Period.
Chris Ann Cleland, Associate Broker- Licensed in Virginia, GRI, SFR, Northern Virginia Short Sale Specialist. Affiliated with Long & Foster, 7526 Limestone Drive, Gainesville, VA 20155. To contact Chris Ann, call 703-402-0037 or email chrisann@LNF.com. Or you can visit her website: www.nvarealestate.net.
Header photos taken by Chris Ann Cleland.
The opinions expressed in this post are those of Chris Ann Cleland, not those of Long & Foster REALTORS®.