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It's an Offer!....But is Just Any Offer Good Enough For a Short Sale??

By Therese VanderMeer

Real Estate Agent with Midwest Properties of MI - Grand Rapids

June 23, 2010 04:50 PM

Am I wrong in thinking that just getting any offer is no longer good enough for our Short Sales?? I currently have a couple of Short Sales we received offers on but nothing that held the Buyer accountable nor showed that they were serious Buyers. It was really more like, let's just cast a net out there and see if we can get lucky!

You know the offers....offers that come in without an EMD, no Bank Pre-Approval letter, requesting a quick closing, 45 days (seriously??) no inspections until Lender Approval, Seller to contribute 6% of Purchase Price towards closing costs etc.. (now you get the jest).

I must admit I have a difficult time taking these offers very seriously. Do these Buyers really want these homes (which are great deals) and what is it in these offers that makes them the least bit vested in the homes purchase?? I'll tell you......absolutely nothing.

So I discussed the offers over with my clients and went back with counters something like this.....

1. EMD required upon acceptance of offer.

2. Buyer to allow 4 months to close from date of acceptance of offer.

3. Home to be Sold "As Is" Seller to contribute no funds towards repairs.

4. Seller to bring no Money to close for any reason etc....

5. Inspections to be completed within standard 10 day time frame as per Purchase Agreement.

6. Buyer will not pursue other purchasing alternatives for as long as Purchase Agreement is valid.

We went back a forth in negotiations, one of the Short Sales moved forward, accepted most of our requests and we are now on track to close....the other did not want to be tied down and would only commit to a 60 day time frame for the Buyer to determine if "things were moving forward fast enough". (and exactly what would he have judged that by?)

Unfortunately, that was not enough for my Sellers who now have only 4 months remaining in their Redemption Period. (and happily did get a more serious offer!) My Sellers who are at high risk of losing their homes and who are in need of more than anything else a serious and vested Buyer. A Buyer who has been well counseled by their Agent as to what to expect with the short sale process, understanding that it takes patience and a will of iron to get through to the other side. One who will stick with them through the long haul and will allow a reasonable amount of time now needed to close a short sale transaction.

Time is of the essence for my Sellers and if our Buyers decide to walk away after months of negotiations because they have absolutely nothing vested and nothing to lose....my Sellers could very well be left with no further recourse and ultimately go to foreclosure.

....this is a high and risky possibility when taking a chance on a Buyer who is really not very serious at all.

So I wonder....is just any offer good enough for our Short Sales??

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Cameron Novak

The Homefinding Center - 1000 Palms, CA

Real Estate Broker since 2008

Just any offer gets the process started!

Jun 23, 2010 04:57 PM

Dan Edward Phillips

Dan Edward Phillips, Humboldt and Del Norte Counties, CA - Eureka, CA

Humboldt and Del Norte Counties, CA

You have a good point, the problem for the buyer is not the sellers but the banks.

Jun 23, 2010 05:11 PM

Therese VanderMeer

Midwest Properties of MI - Grand Rapids - Jenison, MI

Realtor-Greater Grand Rapids, MI area communities

Hi Cameron, That's very true but it may also be wasted time when the clock is ticking and time is short. Your point is exactly what prompted this Blog for me, for many Realtors feel the same as you and I do hear often....It's an Offer! Thanks for your comment. :-)

Jun 23, 2010 05:26 PM

Hi Dan, Thanks and you are certainly right...it's all about the banks.

Jun 23, 2010 05:28 PM

Wade Kawahara

Dominion Real Estate Partners, LLC - Phoenix, AZ

Those offers sound like a waste of time for everyone involved. Why wouldn't a buyer make an offer with the right and complete paperwork. The process is long enough without making extra steps to gather all of the paperwork.

Jun 23, 2010 06:01 PM

Robert L. Brown

www.mrbrownsellsgr.com - Grand Rapids, MI

Grand Rapids Real Estate Bellabay Realty, West Mic

I don't agree with all your points. The one about doing an inspection BEFORE the bank approval process. I would never have a client do this beofre that step. And yes i do agree with the offer having a good EMD behind it. Buyers have to be serious.

Jun 24, 2010 02:55 PM

Hi Wade: It would definatetly be very helpful if all offers came across with full and complete paper work. I can't say these offers were a waste however because after negotiations one of them did move forward. I do believe though that it is important for Buyers to show SS sellers that they are serious about the purchase process and 1-6 mentioned above are some ways that they can do that. Thanks for your comment!

Jun 25, 2010 01:21 AM

Hello Robert! I understand your position on the inspections and many others agree with you. I look at it a bit different however in that these homes are great deals for our Buyers and if they think this is the home for them...wouldnt it be worth $200-$300 to find out early on if there are issues with the home that they just can't live with?? If they wait for lender approval this will most likely take 3-6 months, then to have inspections only to find something that makes the deal fall apart...the process has now been a waste of much time for both sides. This happens much more often in Short Sales than any of us would like.

I actually see it as more of a protection on both sides and feel a $200 - $300 investment on the front end is not much to ask of the Buyers in these SS transactions with the deals they are getting on these homes.

Thanks for stopping by Robert it's always great to hear from you. :-)

Jun 25, 2010 01:42 AM

Katrina Cole

The Jonathan Arnold Team of Inlanta Mortgage - East Grand Rapids, MI

Inlanta Mortgage, Business Development Manager

Great post! These are the struggles that are being dealt with every day. The banks are looking out for themselves and the buyer and seller can get caught up in it as well. As for the inspections, I would have to agree that I would prefer to know if something was wrong I couldn't live with so I could move on and find another one of the great homes available on the market today.

Jul 02, 2010 04:15 AM

It's an Offer!....But is Just Any Offer Good Enough For a Short Sale??

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