I presently have 7 short sales listings in my listing inventory and I'm not a big fan of the person that comes in within one week of the home being on the market and writing an offer for 40-50% of the loan amount.
The fact is, when a buyer calls on one of these short sale properties, I refer them to another agent in my office as I don't like to work both ends of the transaction. I don't feel I can be fair to all parties involved with all the work that is involved in a short sale.
But, what happens when this buyer comes back with the agent I referred them to and puts that offer at 50% of the amount left on the loan? Is my buyer insulted or do they just say I'm going to lose this home anyway and they want to sign the offer and let the bank decide?
Now, from my point of view it is a great thing to have an offer on the property, because it now gets a negotiator assigned and we can start the ball rolling on this property and hopefully get a better offer on the property that is better for the bank and the community as a whole. Selling a property a 50% of the loan amount doesn't help comps in a neighborhood.
As time goes along you see that the auction date is now been announced and you still have 5 months before that date arrives, but the next day you get an e-mail saying they are accepting the buyer's offer. WHAT? That was a joke, are you really serious?
Now, my seller would be happy because they have no foreclosure on their record and their lawyer is making sure they don't get a 1099 at the end of the year and the buyer is happy they are getting a great deal, but I'm still sad for the community and the United States tax payer.
The community now will have another home that brings down the comps for the area and the bank will have a loss that they will take to the government for more of our money as part of the bailout. Sometimes, I have to wonder what the banks are thinking, but at the same time, I can't blame these people that put these offers in knowing that sometimes, they may just get them.
Todd Clark - broker
Kastings & Associates