Make Your Best Offer Up Front on a Short Sale
The days of making low ball offers for everything in site are long gone. And, if you are considering making such offers on short sales, you will find yourself in a frustrating position. Chris Ann Cleland of Bristow, VA explains why:
Make Your Best Offer Up Front on a Short Sale
My latest short sale listing in Gainesville got a lot more offers than I expected over the weekend. On Sunday night, my Seller and I reviewed four. All were at or above the list price. Three had no or very minimal contingencies, no seller subsidy and deposited their earnest money at ratification. (That last part is an indication of how invested the buyer is in the sale. No money deposited to many Short Sale Agents is like announcing you are still looking for a home.) One asked for a truck load of closing cost help (despite having a truck load for a down payment) and delayed deposit of the earnest money. This one stand out also had the highest number of contingencies. While it would've been the only owner-occupant offering to purchase the home, it was also the weakest contract.
When I called the agent to let her know that her buyer didn't have a shot when reviewing the other offers, I also made suggestions about how she could make his offers stronger in situations like this. He was putting a lot of money down. It was doubtful he needed closing cost help. And if he did, perhaps he could work them into his mortgage. He was the second or third offer in, so going in with a net below list price was a shock. And not depositing his earnest money up front was a bad indicator that his intention was to keep house hunting. Especially when the listing had requested the deposit be made at ratification, not short sale approval.
The agent was angry. "He would've done ALL that if the bank asked him too!"
Ah. There's that pesky problem again. A lot of real estate agents don't understand that it is the SELLER that chooses which offer to submit to the bank on a Short Sale. And if there are offers that are better than yours, why would they pick it? These are also the agents that don't want to see a seller countering undesirable contract terms BEFORE accepting it and submitting it to the bank. They feel their buyer deserves a chance at a deal. I can't tell you how many agents call me daily and propose undesirable offers with the verbal promise, "Tell the seller my buyer will agree to whatever the bank dictates. We just want to see if the bank will take it."
If you want a home listed as a short sale, run the comps and write the best offer you can. As a Short Sale Agent, that's what's I'm doing when I advise my sellers whether they should accept or counter an offer. It's exactly what a bank is going to do, so why waste time off the market with a verbal promise from a low ball buyer to accept the bank's terms later on? The only thing a buyer is committed to doing is what he or she agreed to do in writing. And as for banks approving offers that are one-sided for the buyer, if you truly think that's happening, don't count on getting any of those Short Sale offers you're writing to settlement.
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®.
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