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Short Sale Buyers - don't put the cart infront of the horse

By TheMillsTeam YourSebringRealtors

Real Estate Agent with Advantage Realty #1

August 02, 2010 04:28 PM

Short Sale Buyers - don't put the cart infront of the horse!

We got word today from Bank of America that the short sale offer we submitted for one of our transactions was denied because the amount was insufficient. Below is a list of things that went wrong with this transaction and someone is going to have to pay for items such as appraisal, inspection and title work:

1. Don't tell your loan officer to order the appraisal BEFORE there is short sale approval!
Why? The appraiser wants to get paid regardless of how the transaction turns out. You do not want to have to pay for an appraisal when the seller's lender has not approved the short sale yet.

2. Don't have a home inspection done BEFORE there is short sale approval!
Why? The home inspection wants to get paid regardless of how the transaction turns out. You do not want to hae to pay for a home inspection when the seller's lender has not approved the short sale yet.

3. Do not celebrate a short sale approval when there is no short sale approval. Without a short sale approval letter, there is no short sale approval - no matter what.

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Carol West

Carol West Real Estate, LLC - Hillsboro, OR

Real Estate Agent, Hillsboro, Beaverton, Portland

Good advise on this post. Thanks for sharing your experience with us.

Aug 02, 2010 04:30 PM

Stanley Stepak

Howard Hanna - Avon Lake, OH - Avon Lake, OH

Realtor - Avon Lake, Avon, Bay Village, Westlake,

You could not have said this better, This is good advise on timing and being patient too

Aug 02, 2010 04:40 PM

Ben Benita

Ben Benita - Gainesville, VA

Speaker, Author, Game Changer, Coach

We have been successfully negotiating short sales for almost 5 years (I am not an agent, but, do run one of the best short sale negoation companies anywhere....yes, I realize it sounds like I have a big ego, BUT, we are good b/c we HAVE to be).

Appraisals and home inspections -- generally speaking, you are 100% correct, do not get them PRIOR to approvals, however, there are exceptions when it makes sense, and, will help you get to closing (primarily when you are given a BPO or bank appraisal that is WAAAAY out of line with reality....if you have done several short sales, you know this is not uncommon.

Sending in a third party appraisal and/or home inspection and/or general contractor estiamtes ALL help with short sale escalations, and, in getting new valuations ordered.

As far as "partying" before you have a letter in hand, learned that the hard way many years ago...even if you are told or e-mailed something about your offer being "approved", that CAN mean simply that an approval letter is in route, BUT, it could be for a reduced commission (you should ALWAYS ALWAYS ALWAYS negotiate for 6% or more), or, the approval COULD reflect a counter offer from the loan Servicer (you needt o know the difference between the loan servicer and the Ivnestor on teh note).

Anyway, will try to keep this short....the Mills Team is correct on what is written above for 9 out of 10 short sales.

All my best to everyone,

Sincerely,

Ben Benita, Speaker, Radio Guest

Author - "Are You More LIkely TO See BIgfoot Or A SHort Sale APproval Letter?"

BBenita@Comcast.net

Aug 07, 2010 08:04 PM

TheMillsTeam YourSebringRealtors

Advantage Realty #1 - Sebring, FL

863-212-5441

I'm actually working with a buyer's agent right now that has given the buyer's lender green light and said "We have short sale approval". Unfortunately, the buyer's lender didn't check with me - there was no short sale approval.

Few weeks after that BoA countered the closing date, buyer's agent announced short sale approval to her buyer. Hm, but there wasn't one. To this day, we still don't have one! We're also out of contract and even though BoA has asked us to re-submit, buyer's agent is not capable of re-writing a contract with terms previously agreed upon.

It's a nightmare!

Aug 12, 2010 12:27 AM

MichelleCherie Carr Crowe .Just Call. 408-252-8900

Get Results Team...Just Call (408) 252-8900! . DRE #00901962 . Licensed to Sell since 1985 . Altas Realty - San Jose, CA

Family Helping Families Buy & Sell Homes 40+ Years

Sadly, there are too many people stuck living thru nightmares right now.

Aug 18, 2010 09:03 PM

Dave Halpern

Dave Halpern Real Estate Agent, Inc., Louisville, KY (502) 664-7827 - Louisville, KY

Louisville Short Sale Expert

Realtors should always have the buyers sign an addendum that any inspections, appraisals and other closing expenses that are conducted prior to official short sale acceptance are conducted at the buyer's risk.

Aug 22, 2010 08:03 AM

Anonymous

Dave Robles

Thanks for your insighful advice. I agree about holding off on the appraisal but not the physical inspection. As both a listing and buyers agent I advise the clients to invest in the home inspection prior to the short sale package being submitted. That way if there are any issues with the house we can negotiate them out upfron because there is no negotiating once the oval comes from the lender. I have seen too many sales fall out because the buyer inspected and wanted a 10K credit for this or that and it's simply too late in the process for that.

Aug 23, 2010 03:26 AM

Short Sale Buyers - don't put the cart infront of the horse

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