There are Repercussions for Sacramento Short Sale Sellers Who Reject Full Price Offers

If you don't offer list price for that short sale, does the seller have to take your offer? If you are looking to buy a short sale in Sacramento, that answer is obviously no. However, there are some buyer's agents in town who might tell you differently; however, I'm sorry to say, they would be wrong. But what if the offer is full price? What is the seller's obligation then?

There is a little known MLS rule that says a Sacramento short sale agent must disclose a rejected offer if the offer was full price. If a buyer's agent submits a full price offer and the seller rejects it, the agent needs to note that rejection in MLS. Yup, you've got to tell other agents that your seller rejected a full price offer. This rule was instituted, I presume, because there are agents who will dramatically underprice listings in order to drive multiple offers. The thing is that strategy does not always work.

You've got to first identify that desirable home, and price isn't always the motivating factor. The hot homes are the ones that everybody wants. You know it when you walk in the door. If you don't know it, you probably can't price the short sale, either. It's one of those intuitive things. If your home is one of those that everybody wants to buy, you can probably get away with underpricing. The reason is somebody will offer more than list price and probably will submit an offer you can take in good conscience. But if it's really a hot home, you don't need to underprice.

Sometimes, though, all of the buyers will offer list price. Nobody will go over list. You can't always predict how it will work. It's a calculated risk.

One of my short sales in Roseville was priced way under list price. The reasoning was it probably would not qualify for FHA. That eliminates a lot of buyers. It needed some work. But within the first few days on market we received two full price offers. One was all cash and the other was 25% down, conventional. You know what that says? That says the home is grossly underpriced, which means the short sale bank will most likely not accept either of those offers.

So, we immediately raised the price by another 10%. Sure enough, it took another few weeks or so, but we eventually received a suitable offer. An offer the bank is likely to accept. Of course, those early buyers are probably scratching their heads and asking themselves what happened. The key is to find a buyer the bank will accept. Not every buyer or offer is suitable.

In another escrow, we received a full price offer that was perfect. I had even uploaded the offer to DocuSign for the seller to sign. While we were waiting for signature, the buyer's agent sent an addendum to lower the price by $1,000. I asked, "What are you doing? You agreed to list price." Nope, the buyer changed his or her mind, wanted to lower the price. Well, you know what? The seller isn't selling to this buyer.

"You can't do that!" The buyer's agent was livid. Not only can we do it, the seller did it. We rejected the offer. We're gonna cut our losses now and not down the road after short sale approval. Some buyers you simply don't want to bet the bank on. In a Weintraub short sale, we choose our buyers carefully. There is enough excitement in a short sale and enough challenges as it is. We don't need to add an indecisive buyer to the mix. And my sellers fully agree.

---

Certified HAFA Specialist

 

 

 

 

 

 

Sacramento Real Estate Listings

 

 

 

Elizabeth Weintraub is an author, home buying expert for About.com, a Land Park resident, and a veteran real estate agent who specializes in older, classic homes in Land Park, Curtis Park, Midtown and East Sacramento, as well as tract homes in Elk Grove, Natomas, Roseville and Lincoln. Weintraub is also a Sacramento Short Sale agent who lists and successfully sells short sales throughout the four-county Sacramento area with an emphasis on Elk Grove. Call Elizabeth Weintraub at 916.233.6759. Put 40 years of real estate experience to work for you. Broker-Associate at Lyon Real Estate. BRE License # 00697006.

The Short Sale Savior, by Elizabeth Weintraub, available with free shipping.

Photo: Unless otherwise noted in this blog, the photo is copyrighted by Big Stock Photo and used with permission.The views expressed herein are Weintraub's personal views and do not reflect the views of Lyon Real Estate. Disclaimer: If this post contains a listing, information is deemed reliable as of the date it was written. After that date, the listing may be sold, listed by another brokerage, canceled, pending or taken temporarily off the market, and the price could change without notice; it could blow up, explode or vanish. To find out the present status of any listing, please go to elizabethweintraub.com.