Life in the Short Sale lane!

AnnaMarie:

You are correct!  Sending multiple contracts into the lender is just going to confuse them - or worse, slow down your file or kill it.

I agree totally with the comments above - "all offers will be considered" but the best one goes to the lender.  And it may not ALWAYS be the highest offer! 

We qualify the buyers as much as we qualify the short sale sellers.  An offer above full price that asks for 6% seller contributions and struggles to come up with the earnest $$$ may not be accepted above a cash offer for less than asking price.

We sometimes forget - or are not knowledgeable in the first place - The homeowner is the seller that we represent.  The lender approves the "short payoff" that will be accepted, not the contracts.

Great post. I believe in submitting one offer. Present all offers to the seller but select one offer. My duty is to the seller not the bank. If you send all, you are more than likely not going to have any buyers left by the time the bank reaches a decision not to mention the bank will take longer to process. Why.. because if I am representing the buyer I cringe when agent submits all. I know that by submitting all,waiting the short sale out is not in my clients best interest when multi offers are submitted. Why would I convince my buyer to stick around when it is a long time to wait for an even bigger fingers crossed, hope they take it! In addition I do not think highest and best always works. If the highest is above the comps. it again is not in the best interest of my client. This leads to problems of bank wanting the offer and buyer not willing to pay difference over comps. And... it is already compounded by what will be the comps at the time the bank makes a decision, that could also have changed. Then buyer walks and now bank may not settle for a more reasonable offer easily. I think sellers should pick an offer that is easily replaced if buyer walks. All others go into backup position if they want it. The goal IMHO is to help get your clients (seller) home sold so that they do not have to face foreclosure and all the ramifications that follow that. Also picking someone whom you think has a stronger desire to stick around is important.

Additionally, constantly following up with bank is crucial. And finally.... updating buyers agent of progress of your actions with bank. I think when there is contact with buyers agent there is a better chance that the buyer is going to stick around.

AnnaMarie,

You handle your short sales the same way I do mine.  The process works too if you work the process!  Closing 2 shorts a month for past 5 months.  Will close 3 this month as we're starting to fill the pipeline a little faster, and getting better at working the banks to get them through their pipeline faster too!

Got that you use the Short Sale Genius software; but, for edification of folks who would like to learn a good short sale program/process - could you share one or more programs that you feel have taught you best.  Maybe that is Short Sale Genius too - if so, please confirm.

Keep up the good work helping homeowners!

Kent

You have helped one million homeowners? Really? Can you explain more about that? That's a pretty huge and impressive number!

AnnaMarie,

Tell me more about Short Sale Genius software.  What is it? Anything that helps me organize and streamline the process, I'm all for it.

AnnaMarie:  I couldn't agree with you more.  Agents that send multiple offers are the ones that are clogging the short sale approval system.  The negotiators don't know our local markets.  They don't know which offer is solid in terms of appraisal.  Agents are only shooting ourselves in the foot when they do this.  And I'm sure they are the same agents that get P.O.'ed when buyers write multiple offers on multiple short sales and wait to see which one gets accepted.

There is some fraud going on in the Short Sale market.  You probably do not have to send in all the offers,the problem is sometimes the best possible offers are not sent in.

One reasonalble offer goes to the bank.  If the listing agent is doing it any other way, I will advise by client that it will probably be a waste of time.  Any other offers should go in line, and only be considered if the initial buyer does not agree to the banks price.  Let's keep it simple, everyone.  We are helping our clients here, not the banks!

When I wake up from a short sale nightmare, I repeat to myself, Code of Ethics, Code of Ethics. If only those Realtors who don't know what they are doing on short sales would not sleepwalk through that education.

On the buyers side the most important thing you can do is to find out the qualifications of the listing agent and see if they know what the hell they are doing.

Ah yes...the long and tedious road of a short sale. For agents who know the ropes, these transactions can go relatively smooth albeit slow. But OMG if you get with an agent who is not skilled in short sales. YIKES!

Yeah Anna Marie. I have an "Agent" still trying to figure out the short sale process. It has been 6 months since we made that offer! I would withdraw it, however, my clients love the home. They are still shopping though.

We are still working for the Seller (home owner) not the bank, that is the point it is a Pre-Foreclosure listing. If we do our jobs by selecting the first best offer, have the seller sign and send it to the bank we can keep all the players in their traditional rolls. Do not let the bank do the Realtor's job, we select the best offer and negotiate with the bank, we do not just ask the bank what do you want to do. Continue to help families during these troubling and financially trying times.

Hi Anna Marie,  Great post!   Yes, it seems short sales are getting more prevalant.. Want to learn all I can on these. congrats on  feature post!

Usually most banks will only look at one offer a time, so when an agent tells me that on a short sale, depending on the bank, most of the time it is not true

AnnaMarie - Great post and congrats on the feature. I agree that agents who are unfamiliar with SS should NOT do them. I have seen many cases where the listing agent did not understand the SS process and the home ended up in foreclosure. There were offers but if the listing agent is completely clueless on the SS process the buyers end up walking and the seller is left holding the bag.

Ambassador for Helping a Million Homeowners! How in the world did you do that? That is an incredible number!

Banks are already overwhelmed and sending offers in numbered order from time received is the best way. I help the seller on each offer as it comes in by having them counter to a realistic number and then we let other Agent know that their offer is Primary, 1st backup and so on. You must disclose them as a backup as like any other contingency. #1 RULE is to put it in writing!

Somone brought up a good point about it's not the banks home 'yet' to sell so why are you sending multiple offers to them? Where's the seller?

Has anyone seen the practice of placing a short sale listing in the MLS and then stating in the Agent Remarks "Seller does not want any showings" ? I tried unsuccessfully to take my buyers on several occasions to this listing only to be rebuffed by the agent or had my voicemails ignored. It was on the MLS for 35 days as Active short sale and then a few days ago it went contingent! How can an agent and seller accept an offer and be acting in the interest of the seller's lender when they have consistently refused to show the property?Has the agent acted in the interest of the bank by not allowing other agents to bring their clients and so make offers? Did the agent double end by accepting sign calls only? This stinks in my opinion but I am seeing it quite frequently especially in areas where demand is high - List the house and stop your competition from bringing a buyer with an offer higher than your clients - great sales tactic!

I am actually horrified that many agents don't actually know the difference between a short sale and an reo sale.

If you don't know that your fiduciary duty is to the seller and that the banks approval is just a contingency then why on earth are you even listing the house? I have even heard of agents asking the seller to sign all the offers and send them to the bank - are they expecting the seller to sell the house multiple times to different people?

The most sensible way to handle it is to state a period of time in which you as the listing agent will accept offers for your sellers review. At the end of that time the agent guides the seller on the most appropriate offer to submit for approval by the bank, pick one and seller signs it and let's the successful offeree know, and the offer goes to the lender(s) in what is known as a "short sale package" which consists of hardship letter, bank statements, tax returns etc as proof that the seller is unable to pay the mortgage but  here is a buyer ready to take the property at this price. The status on MLS changes to Short Sale Contingent (in California) and other offers are placed in backup in the order they were submitted.

 It is quite common now for short sale listing agents to only accept offers where the deposit check is cashed and placed into escrow. When this happens it is a good idea to ask the listing agent to change the status to pending on MLS as a sign of good faith. It is also vital as a listing agent to keep the buyer and the buyers agent involved by supplying them with regular updates on progress. Most short sales fall apart because the listing agent doesnt bother to do this and the buyers lose interest.

It ain't rocket science! :-)