Do You Have Time To Waste? Then Send In That Low Short Sale Offer!

Real Estate Broker/Owner with Rulnick Realty, Inc.

short sale negotiations 


Do you think you’re  sneaky?  Sending in a purposefully low offer to the short sale lender?  You just want to find out "what” price they want so you can get a "real” offer later, right?

Most short sale lenders don’t authorize a list price in advance.  This presents a quandary to the short sale listing agent.  Instead of watching the market and keeping an eye toward what the lender might approve, they send in a low-ball offer.  One that will likely NOT be approved.  This method may even be encouraged by the seller to find out what the bank really wants.

Let’s say the home is worth $350,000, but the buyer offered $250,000.  "Send it in! Let the bank decide! Then at least we’ll have a value!” is the common mantra. Why is this a problem?

Your short sale seller probably has to take his home off the market while the lender processes the low offer.  At least that is required by my Emerald Coast Associaton of Realtors MLS.  Your seller is losing marketing time while the lender analyzes the offer you know won’t be accepted.  One month, two months, three months off the market?  All the while, your seller is getting ever closer to foreclosure.

After ordering a Broker Price Opinion or appraisal and establishing a value, the short sale lender will probably deny the short sale or counter offer, since the buyer’s price was far too low.  If there is a counter offer, the buyer, never intending to pay market value, walks.

Result?  Your seller is now stuck with a 90 day valuation or even a six month valuation, if it’s a VA compromise sale. "Yea!" -- You have a price the bank will accept.  "Boo!"-- Your real estate market is still declining.  You are now STUCK with this price you "helped” generate for months to come, because lenders do not order new valuations for every offer.

What is the key to getting a short sale approved ?  Watch your market.  Scan the comparable listings. Price accordingly.  Get a strong offer for fair market value,  a buyer willing to wait and an earnest money deposit.  And get your short sale approved!

It's Wendy!

Wendy Rulnick, Broker, Rulnick Realty, Inc.

Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or local 850-650-7883 ext 204

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Destin FL Real Estate

Destin Short Sales & Pre Foreclosure Help.

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Wendy is a short sale and pre-foreclosure specialist and has been featured in "Kiplinger Personal Finance Magazine" and "Florida Realtor Magazine". Call Wendy Rulnick, Broker/Owner,to list and sell your home or condo on the Emerald Coast of Florida in Walton, Okaloosa and Santa Rosa County-  Destin, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Crestview, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field. 

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"It's Wendy... It's Sold!"

Wendy Rulnick, Broker/Owner Rulnick Realty, Inc.

Call Wendy Rulnick 1-850-650-7883 ext 204

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Wendy Rulnick is the marketing choice for sellers on the Emerald Coast who want to list and get their homes and condos sold in Destin, Sandestin, Bluewater Bay, Santa Rosa Beach, 30-A, Watercolor, Seaside, Rosemary Beach, Seacrest Beach, Kelly Plantation, Regatta Bay, Destiny and more.

Rulnick Realty



Re-Blogged 3 times:

Re-Blogged By Re-Blogged At
  1. Susan Neal 09/10/2010 12:04 PM
  2. Sidney Kutchuk 09/25/2010 02:06 PM
  3. Sergio Rebollo Jr. 01/29/2011 01:32 AM
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William J. Archambault, Jr.
The Real Estate Investment Institute - Houston, TX


Great advice, but low compared to what?

Low compared to your list price or the market?

Not all listing agents are Wendy Rulnick!

Unless I know the lister I look at the list price like e-bay's "Buy it Now" price, often no more than a pipe dream.


Sep 10, 2010 11:57 AM #1
Susan Neal
RE/MAX Gold, Fair Oaks - Fair Oaks, CA
Fair Oaks CA & Sacramento Area Real Estate Broker

Hi Wendy - This is a pet peeve of mine too.  When we list short sales, we try to come as close as possible to the amount we think the bank can be convinced to take, while being sensitive to the market.  That figure might be only about 50% of what it is owed, and can be a difficult thing to achieve.  Then a buyer comes along and wants to cut that figure in half.  I advise my sellers not to accept that offer. 

Sep 10, 2010 12:02 PM #2
Satar Naghshineh
Satar - Amiri Property and Financial Services Corp. - Irvine, CA

Coming in low works for me. However, I won't be able to pull off 250k if the FMV is 350k unless we have some damage. In My area, if the lowes comp is 350k, then I can get away with 315k. Maybe even 300k.

Sep 10, 2010 07:58 PM #3
Laura Giannotta
Keller Williams Realty - Atlantic Shore - Little Egg Harbor, NJ
Your Realtor Down the Shore!

Excellent advice Wendy...this goes for buyer's too!  I'm sick of low ball offers, with agents trying to tell me it's a fair price...are they looking at the same comps I am? 

Sep 10, 2010 11:34 PM #4
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

We regularly have the seller reject totally unreasonable short sale offers.  It will only be a waste of time for all parties involved.

Sep 11, 2010 12:04 AM #5
Wendy Rulnick
Rulnick Realty, Inc. - Destin, FL
"It's Wendy... It's Sold!"

Bill - Compared to fair market value, of course.  You're right, the list price may be wrong!

Susan - Good advice.

Satar - There's low, then there's LOW.  I am talking about those any price just to get a response offers.

Laura - They find their own comps somehow.

Gabe - Agree!

Sep 11, 2010 03:32 AM #6
Paul Francis
Francis Group Real Estate - Las Vegas, NV
Las Vegas Real Estate Agent - Summerlin Homes

I'm right with you... listing short sales and taking low ball offers for what you describe is a bad practice. Not only for what you mention... but when that home goes back on the market several months later.. it looks like an old listing and buyers start questioning why it's been available for so long.

Let's say the low ball offer does go through... Great! or...

Corelogic recently came out with some report to lenders/servicers concerning short sale mortgage fraud... it appears they are setting up some type of database for short sale transactions to store information and investigate questionable short sales. According to their report, over $310 Million dollars a year are being lost with questionable short sale practices.

I certainly don't want to make some list of short sale services with questionable practices and your post indicates you certainly do not want to be on it either...

Key Phrase in the Short Sale Report to Lenders from Corelogic:

Our results suggest that lenders should take fundamental steps to alert themselves to the possibility of improper short sale-to-resale transactions:

and then

Although the fundamental measures listed above can detect inadvertent or small-scale risks, they rarely expose systematic intentional fraud. To do so, lenders must be able to see any concurrent transactions pending on the short sale property. Traditionally, lenders have had no access to such information (at least not in real time), since two or more separate sales typically involve two or more separate lenders. This information can only be uncovered collectively — affected lenders agree to share information — or via a formal lender consortium. The CoreLogic Mortgage Fraud Consortium is such a group.


AKA a collective database of everybody involved in a short sale transaction. (Notice that the lenders/servicers are starting to require 3rd Party Affidavits and/or collecting information on everybody involved in the transaction. Equator, etc??)

I know some agents that practice the low ball offer theory (and some that do not even send in real offers) and they do get some of the low ball offer deals through. Get 2, 3, 4+ of these deals through and a pattern forms. If I'm a lender/servicer... I launch an investigation. I find out that a short sale servicer has been shorting me.. I blackball them.

Just my thoughts...

Nice Post..

Sep 11, 2010 09:15 AM #7
Wendy Rulnick
Rulnick Realty, Inc. - Destin, FL
"It's Wendy... It's Sold!"

Hi Paul - Sounds like an interesting study you are quoting.  I have heard about the fake offer deals, too.  Very scary.

Sep 12, 2010 04:37 AM #8
Sidney Kutchuk - Realty Works Temecula Kutchuk - Realty Works Temecula
Realty Works Temecula - Temecula, CA
Realty Works Temecula

Wendy:  I had a client last week get really irritated with me when I tried to explain that the listing agent had a property priced way to low.  Here in California there are so many comparables in the area that I knew that when the bank got around to doing their BPO they would price the property higher and ask for more money.   I told this to my clients because I didn't want them to be disappointed or perhaps throw in the towel like so many do when the price is countered back higher by the bank. 

Sep 12, 2010 07:30 AM #9
Marcy Moyer
eXp Realty of California Silicon Valley Probate, Trust, and Investment Sales - Mountain View, CA
Probate, Trust, and Investment Specialist

Wendy is so right. Especially now with so many of the banks refusing to postpone trustee sales or auctions if the seller presents a lets test the water offer they could very likely lose the house.


Sep 12, 2010 12:27 PM #10
Nona Swann
Swann & Associates Real Estate - Indialantic, FL
Serving the needs of the Sellers in Brevard County

Very good post, Wendy. I had a previous client call me today and they found a townhome that is a short sale and they want to make an offer on it. I asked them to give me time to see if it is priced fairly or if the agent just low balled the property to get offers that wouldn't fly. I love your article.

You can always tell a professional !

Sep 25, 2010 02:13 PM #11
Liz Flint
Century 21 Hardee-Team Realty - Houston, TX
Houston\Tomball Realtor (832)816-8066

Hi Wendy, good advice.  I had my first short sale actually go through this month.  I was very happy.  And I did have a buyer that was very patient.

Sep 25, 2010 02:32 PM #12
Anja Kerstens
Coldwell Banker Residential Brokerage - Morgan Hill, CA
GRI, CDPE, CHS, ASP, Selling Silicon Valley Real


great post.  You brought up good questions.  I agree with you and am not happy to work with anyone who lists a short sale property too low compared to similar properties in the area.  Just 3 weeks ago I showed a buyer a short sale property listed for $758K.  Now a new agent listed it for $530K.  I am not even going to show the property to any of my buyers.  No way the lender is going to approve any offer in that price range.

Dec 12, 2010 07:20 PM #13
Christine McInerney
Great Life RE - Knoxville, TN
The McInerney Team, Knoxville TN Homes For Sale

This is great advice.  I would imagine that submitting ridiculously low offers to the bank could also hurt your reputation as a negotiator as well.

Jan 18, 2011 08:59 AM #14
Sergio Rebollo Jr.
Real Estate TeamMates - Miami, FL

Hi Wendy...this is great advice!! Our primary responsibility is to the Seller.  Unlikely that $100K below market would getaccepted on $350K value but if it does, you may be putting the Seller in a position where they will ask for meaningful cash at closing to contribute to the loss!!  There is no benefit to the Seller unless it's a distant cousin making the offer.  As Realtor's we have to be diligent and on our toes at ALL times!!

Jan 29, 2011 01:27 AM #15
Pam Dent
Gayle Harvey Real Estate, Inc. - Charlottesville, VA
REALTOR® - Charlottesville Virginia Homes / Horse

Hi Wendy - You make many good points.  Sometimes it can be hard to educate buyers as to fair market value when they find several of these short sales listed way below market value.  Sometimes I have buyers who then think that all of the comps that are fairly priced are priced too high.  It is often hard for them to understand that this is just a fantasy figure the listing agent is running up the flagpole to solicit an offer.  They think that they will actually be able to buy the home at the price that it is listed for.

Jan 29, 2011 01:45 AM #16
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