Real Estate Blog - Short Sale Offers- Is This a New Trend?

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Short Sale Offers- Is This a New Trend?

In the past ten days, I've had agents call me with "verbal" offers on three of my short sale listings.

Property: House in Navarre FL List price $114,000...verbal offer $70,000

Property: Condo in Sandestin FL List price $580,000...verbal offer $500,000

Property: House in Niceville FL List price $199,900... verbal offer $120,000

Is this a trend? In each of these cases, the selling agent said the buyer absolutely would not or was not qualified to go higher than the verbal amount. I wonder then why these agents were showing properties to buyers that were up to 60% higher the maximum price buyers were willing or able to pay? In one case, the buyer was going to make an offer without seeing the property, and then wanted an "out" written up contingent upon a satisfactory pre-closing inspection. His agent even asked me how to draw up contract language so the buyer would not lose his deposit if he chose to back out.

First of all, as an agent, why waste your time? Sure, some short sales or traditional sales are overpriced so that one might be able to procure them for 20% less than list, but 40%? Why take that gamble? When a buyer requests to see properties much higher than they are qualified for or are willing to pay, you are wasting your own time, the buyer's time, the seller's time, the short sale lender's time, and the listing agent's time. In the current economic situation, I understand why many agents want to grasp at any possible way to make a sale. However, one might be better off waiting for a qualified buyer whom you know has a reasonable chance of closing.

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Wendy Rulnick, Broker, CRP, CRS, GRI, ABR Rulnick Realty, Inc.

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Wendy Rulnick specializes in real estate sales, short sales, traditional sales on Emerald Coast of Florida: Destin Florida real estate, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Dune Allen, Blue Mountain Beach, Freeport, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field. Wendy Rulnick, Broker and Realtor, has been selling real estate for almost 20 years. She has won numerous awards, including the coveted ADDY for advertising design. An expert marketer of real estate listings, she negotiates successfully to her dients' advantage. She is supported by a team of top buyer specialists. She lists and sells homes, condos and townhomes.

This site, Wendy Rulnick or Rulnick Realty, Inc. is not providing legal or tax advice. The information provided is for educational and informational purposes only. It is recommended that sellers considering a short sale should consult an independent legal and tax advisor for more information

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Posted by Wendy Rulnick "Its Wendy!" Destin Short Sales on 12/08/2008 06:29 PM

Comments (30)

Short Sales in the Sales Strategies / Tactics Channel

buying short sales, navarre short sales, niceville short sales, destin short sales, sandestin short sales

Originally posted at: Destin Short Sales- Emerald Coast Florida Real Estate: Short Sale Offers- Is This a New Trend?

Post is included in group: Short Sales Specialists
Post is included in group: Short Sale Specialists & Pre-Foreclosure Education
Post is included in group: Short Sales and Forclosures ONLY
Post is included in group: Short Sale REALTORS®
Post is included in group: Sharing Information of Short Sales

30 Comments on Short Sale Offers- Is This a New Trend?

DEC

2008

Who knows maybe there's some new "short sale guru" out there advocating running around making verbals on things. It doesn't make any sense because you can't do anything with a verbal. More or less just testing the waters.

Brian - It doesn't make sense - the time responding takes away from productive endeavors, too.

Hi Wendy...I had the same thing happen to me this past week. One bedroom REO's in this complex are listed between $50,000 and $60,000. I have a short sale listed at $55,000. I got a verbal at $30,000. I am a professional so I didn't laugh while on the phone. Once I hung up though...I fell off my chair!!

I see many investors making the verbal low ball offer testing the waters. If they do not get a bite they move to the next one. Everyone wants a "deal". People think since it is a foreclosure or short sale they can offer 50%of the price and the bank will give it away. I have had a couple of buyers do very well by making reasonable offers on short sales.

Sergio - It's almost like combat out there! Anything goes.

James - You are lucky.

DEC

2008

Wendy that's been going on here in NJ for several months now. I don't understand it and thought it was peculiar to this area!

Laura G

Laura - I guess it's my turn for this phase in short sales.

I agree Wendy. This buyers agent is spinning his wheels. Hopefully he catches on and gets a real client.

Mike - Yup!

DEC

2008

It always amazes me the time that is wasted by some Realtors.

Bill - Wastes all of our time! Just got an offer for $440,000 on the $580,000 listing - grrrr. Thanks for commenting.

DEC

2008

I can't imagine putting in a verbal offer as a buyer's agent. Thankfully we haven't had anything much under asking price on our short sale listings. I hope we don't start seeing this trend in our area.

DEC

2008

Amy - At least they are not taking the time to write such stuff! (Usually)

DEC

2008

I've had the same thing occur. I tell them I need a formal written offer with a pre approval, all on letterhead or the bank loss mitigation department will not consider the offer. They go away. These agents aren't just wasting time, they are stealing oxygen from the rest of us.

J. Philip - Good job on that! Like the oxygen analogy.

I think we forget, at least in Virginia that we have to present all offers to the seller, even verbal offers. That doesn't have anything to do with the bank. If the seller accepts the verbal then one of you has to turn it into a written offer. Chances are the buyer will balk anyway. You can always try and keep the ernest money, that should come with the verbal offer but chances are that won't happen.

Good point, Gene. I suggest to my sellers if they get a verbal offer to counteroffer "Put it in writing".

DEC

2008

Who makes a verbal on a short sale anyway? I have all my sellers sign in the listing agreement that they are not entertaining verbal offers. I don't have time for agents that are really WHEELATERS not REALTORS. Glad to hear that so many of us are stepping up our game.

Kim - Good idea. Wheelaters, that's too funny!

Investors and minimally qualified buyers looking to take advantage of the first poor soul that is that desperate to sell. I don't think it should matter what part of the country you're in, short sale or foreclosure, put it on paper so the verbal doesn't turns into, "huh, I didn't agree to that!?".

Mike - Absolutely. There is so much more to a "contract" than a price, too.

DEC

Everyone thinks they can steal property right now - I just heard of a condo 1 BR/1 BA that was listed for $31,400 locally that had low ball offers, and it was a bank owned foreclosure. On the opposite side, however, I just helped someone buy a pool house in Jax Beach for a great price, all because she wanted to be aggressive on the first offer, and the seller was highly motivated.

DEC

I'm in the process of making an offer for a short sale that's listed for 220k and plan to offer 175k. Just because the bank asks for X doesn't mean they'll get X. These are very difficult times and homes in some areas are not moving which leaves the bank with 2 options. Sale the place or sit on it till summer hoping for a bottom in the market. I don't find it wrong to ask for the best price possible, keep in mind we're the customers, not the bank. Just my 2 cents.

Hello Troy, Short Sale prices are usually not set by the bank, with a few exceptions. Your offer may not be unreasonable, I don't know your market area and the fair market value of the property. Typical bank procedures, if the seller accepts your offer, would be to hire an independent appraiser (not related to any of the parties) to do an appraisal, or to hire an independent agent to do a BPO (broker price opinion) to provide an opinion of value. If the offer minus the expenses to the short sale lender (such as closing costs, fees to a junior lien, etc) are not within a pre-set range, the offer will be declined or counter-offered. When the seller accepts a short sale offer, they may have to take the property off the market, depending on their local customs and requirements. Most sellers are advised to accept an offer that one might reasonably deem to be close to market value. Otherwise, they might be losing marketing time that they could use to procure another offer that probably would be accepted. I certainly see the buyer's point of view. Prices are continuing to decline and most buyers are cautious regarding "overpaying". Some markets are far worse than others. If you are using a real estate agent, which you probably are, I would ask him to do a market analysis for you to see if your offer is within a reasonable range of market value. I really appreciate your input. I wish you the best with your offer.

I have run into this situation as well. The buyer really does not have the means to close, they are just seeing if they can get a deal and then they will want to "flip" it by assigning the contract to another investor who can close the deal. All the gurus have come out of the woodwork promoting real estate riches with short sales.

DEC

Jason - Slick tactic.

All the comments are amazing. Everyone has had an experience and it just seems to be a free for all.

DEC

The bottom feeder are out enmass!

DEC

Kent - They clog up the flow.

I can appreciate J. Philips comment: "These agents aren't just wasting time, they are stealing oxygen from the rest of us."

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