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If You Were Writing an Offer on That Sacramento Short Sale, What Would You Write?

By Elizabeth Weintraub Sacramento Broker

Real Estate Agent with Elizabeth Anne Weintraub, Broker DRE #00697006

July 28, 2009 03:12 AM

Three of my new Sacramento short sale listings are probably going into active contingent status today, meaning the sellers will have accepted an offer. It's not always the highest offer that the seller chooses, although ordinarily that's what sellers want. More often it's the cleanest offer, and the buyer with the heftiest earnest money deposit who is also the most committed -- but what really affects the decision is generally the amount of the offer that the banks' appraisals will support.

Apart from the seller, in any given Sacramento short sale, you've got two banks to appease: the short sale bank and the buyer's bank. It's sort of like Goldilocks and the Three Bears. An offer can be too high or too low or just right. As a Sacramento short sale agent, I advise my sellers to select the offer that is "just right."

Some buyer's agents get upset that short sales are priced low. They can't figure out how much to offer. One agent asked me yesterday, "If you were writing this short sale offer, what would you write?" Nice try. But he has to do his homework. That's why he's paid the big bucks.

If you want to know the price of a cup of coffee, go to Starbucks. You'll find that price advertised on a board in front of your very eyes. You can fork over $4.95 for that grande white mocha frappuccino doused in whipped cream, and Starbucks will deliver the merchandise. But buying real estate requires that one study the comparable sales (and the pending, which will become the comps at your closing) because that's the information an appraiser will use.

This is one of the reasons why real estate is a profession and not a hobby.

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Elizabeth Weintraub is an author, home buying columnist for The New York Times-owned About.com, a Land Park resident, and a Land Park real estate agent who specializes in older, classic homes in Land Park, Curtis Park, Midtown and East Sacramento. Weintraub is also a Sacramento Short Sale agent who lists and successfully sells short sales throughout Sacramento. Call Elizabeth Weintraub at 916.233.6759. Put 35 years of real estate experience to work for you.

The Short Sale Savior,by Elizabeth Weintraub, available through bookstores everywhere and at Amazon.com.

Sacramento Short Sale Agent, Elizabeth Weintraub, has the answers to your Sacramento short sale questions.

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Mary Douglas

United Country Ponderosa Realty, Red Feather Lakes, Colorado - Red Feather Lakes, CO

REALTOR, Red Feather Lakes, Colorado

Hi Elizabeth, But how much would you write it for? (kidding)

Jul 28, 2009 03:20 AM

Cathy McAlister

Cathy Ashley McAlister, GRI CDPE - Broker / Sacramento - Sacramento, CA

Sacramento DRE#00648507

Well said. It is about selecting the best offer with the best chance to make it through ALL phases of the transaction. When writing for a buyer, I counsel them to write the best from the beginning, especially if they are in multiple offer situations. With Best not necessarily meaning highest - just strong and clean. When you as a listing agent are presenting offers, it is far easier to counter for "clean up" than counter to find out what the limits are.

Jul 28, 2009 03:22 AM

Maria Morton

Platinum Realty - Kansas City, MO

Kansas City Real Estate 816-560-3758

Elizabeth, pricing listings and getting the offer right so your buyer wins the home they want is an art.

Jul 28, 2009 03:22 AM

Kathleen Daniels, Probate & Trust Specialist

KD Realty - 408.972.1822 - San Jose, CA

Probate Real Estate Services

Elizabeth, no kidding ... and homework we must do. Too many lazy agents out there who want others to do their homework for them. We have to spend time finding the sweet spot or the "just right" price. Great post- thanks!

Jul 28, 2009 03:39 AM

Gary Woltal

Keller Williams Realty - Flower Mound, TX

Assoc. Broker Realtor SFR Dallas Ft. Worth

Elizabeth, I would think the price to write would be in consultation with a short sale expert in the area like yourself, not just making any old number up.

Jul 28, 2009 05:55 AM

Satar Naghshineh

Satar - Amiri Property and Financial Services Corp. - Irvine, CA

I have a hybrid approach. The short sale is listed on the high end of the comps and systematically lowered. The buyer's agent approaches the short sale and they initially ask me what they should offer. I then state that they should offer what they feel the property is worth and what the buyer is willing to pay. Once I get the offer(s), I look them over and find the most qualified buyer who was willing to pay the most. I then counter that offer as low as possible that I know I can get the short sale for and add items, such as closing cost and home warranty that the buyer didn't ask for. Now I start my negotiations with the foreclosing lenders with a very motivated buyer who will most likely stay loyal as he is expecting a great deal and pay for the expenses that the lender rejects, such as my commissions.

Jul 28, 2009 02:41 PM

Terry & Bonnie Westbrook

Westbrook Realty Broker-Owner - Grand Rapids, MI

Westbrook Realty - Grand Rapids Forest Hills MI Re

You're right we need to advise the client on the appropriate price to offer . That is our job.

Jul 28, 2009 03:24 PM

Elizabeth Weintraub Sacramento Broker

Elizabeth Anne Weintraub, Broker - Sacramento, CA

Put 40 years of experience to work for you

One of the agents who called pleaded with me to help because he was a new agent. And his buyers had hired him. To help them. I wanted to scream: "How much help can you give when you don't know anything? The best thing you could do for your friends is refer them to a competent agent with experience," but I didn't. He meant well. The buyers were clueless. Sometimes you just know such words would fall on deaf ears. I felt sorry for those buyers, though.

Jul 28, 2009 04:54 PM

Tammy Lankford,

Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668 - Eatonton, GA

Broker GA Lake Sinclair/Eatonton/Milledgeville

Can I please get a muffin with my short sale?? J.K.

Jul 28, 2009 04:54 PM

Myrl Jeffcoat

Sacramento, CA

Greater Sacramento Realtor - Retired

I tend to agree with Gary's comment! And, I must admit that I'm guilty as charged with simply ringing up the listing agent of a short sale property, and asking, what is your "educated" guess as to what will make your seller and the bank accept my buyer's offer. And I have had success with that. Most notably when my daughter and her husband bought a short-sale property a few years back. I built a repore with the listing agent, and with information about other components having nothing to do with price, was able to write an offer that would make my daughter/buyer happy, and leave the seller/bank content. For example, one of the hot-button issues for the bank was having my daughter originate the new mortgage through them. It was beneficial for my daughter as well, because they offered an excellent interest rate, with virtually no loan origination fees.

I do my homework, I know what the property is likely worth (in the murky world of today's comps, and appraiser issues, But, as you say Elizabeth, the highest offer doesn't always win the home. And you as the listing agent, may have information valuable in helping formulate an offer on that particular property, which would be beneficial for a buyer agent to know.

I wish procuring short sales for buyers was as easy as looking at the price of my Mocha Latte at Starbucks each morning. But it's pretty clear it goes far beyond that with when a short-sale is involved.

Jul 29, 2009 12:34 AM

Sally K. & David L. Hanson

EXP Realty 414-525-0563 - Brookfield, WI

WI Real Estate Agents - Luxury - Divorce

Ah...the difference between CA and WI...our buyers agents...who are not exactly experienced in short sales and don't get it...don't think they are priced too low...and 80% of the time think this is the best opportunity to play "let's make a deal"....oh not...their answer is always, "The bank will take anything...and anything is better than nothing..."....from the Not so much is not enough school.

Jul 29, 2009 12:39 AM