Why the short sale sellers accepted a cash offer. More good reasons than you think

By
Real Estate Agent with Alain Pinel BRE 01367196
https://activerain.com/droplet/yfw

Why the short sale sellers accepted a cash offer.

Cash is king

Just this morning, my short sale sellers accepted an all cash offer fo their duet in Alameda, CA.

It wasn’t the highest offer (another cash offer was the highest among the dozen offers we received in less than a week from when we activated the listing).

 

The question was asked, why did the sellers choose this offer. Coincidentally, another post asked, In Multiple Offers Is Cash King?


Why did the sellers accept the cash offer?

Perhaps the market is heating up. Even Warren Buffet says It's time to buy real estate."

It could be that there are so very few homes to choose from, and a handful is considered in good condition. Besides location, price is the biggest draw. But it is NOT the only reason why people choose a cash offer.

Factoring in the price, terms and conditions, here’s what went in to the short sale sellers’ decision.

  • Are offers higher than the list price -- no low ball offers are considered. Prices are already significantly lower than what sellers owe. The lower the offer, the less chance of getting the short sale approved
  • Are these offers reasonable compared to market value? Short sale lenders prefer close to or at market value.
  • What if they accept an offer from a buyer who needs to get a loan, and the short sale lender approves that price....but then appraisal comes in at less than the offer...
    • Is the buyer willing to move forward with the purchase?
    • And if so, is the buyer willing to come up with the difference between his loan and the purchase price?
  • Are the buyers willing to open escrow upon acceptance by the sellers and  BEFORE receipt of short sale approval?
  • Are the buyers willing to wait longer than the 45 days that are standard in the short sale addendum?
  • Are the buyers willing to stop looking at other properties, and agree to wait for the short sale approval on this property?
  • Are the buyers willing to buy as is?
    • That is, no repairs, no credits
    • Buyers are responsible for compliance with any and all government regulations and local ordinances
  • Will they agree to shorter contingency periods if any?
  • Have the buyers read and signed off on all the disclosures so they know what to expect and as such, no surprises?
  • Will they agree to work with the sellers’ title company who has already invested effort in preparing a preliminary report and who offers short sale negotiation service?
  • Lastly, who are the people buying the property?
    • Don’t discount the sellers’ emotional state of mind and attachment to the property, coupled with their concerns about their neighbors and the type of people who are going to move into their home.
    • Some sellers may not care, but many do. They want to make sure the people buying the property will also meet certain standards. These are sellers who are not yet detached from their home.


Logic is not completely detached from emotion.
In my short sale sellers’ minds, they went with a couple paying cash, who wants to be close to their first grandchild, who accepted all the conditions the sellers asked for, who had no contingencies other than the final walk through.

And oh, it didn’t hurt that the buyers' offer was one of the highest.

So no, the sellers didn’t leave money on the table. And yes, they got an excellent offer, excellent terms, and high likelihood of getting approved by the short sale lender.


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Short Sale REALTORS®
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bayview estates
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multiple offers short sale
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Ambassador
2,801,957
Dick Greenberg
New Paradigm Partners LLC - Fort Collins, CO
Northern Colorado Residential Real Estate

Hi Pacita - Great post - a very informative walk-thru of the seller's decision making process, including the complications arising from the fact that it's a short sale.

 

Featured in BananaTude!

BananaTude!

 

Apr 01, 2012 09:44 AM #1
Rainmaker
1,023,815
Tim Lorenz
TIM LORENZ - Elite Home Sales Team - Mission Viejo, CA
949 874-2247

Pacita

Remember all real estate sales are personal and emotional.

Apr 01, 2012 12:04 PM #2
Rainmaker
3,324,453
Sally K. & David L. Hanson
EXP Realty 414-525-0563 - Brookfield, WI
WI Real Estate Agents - Luxury - Divorce

Looking beyond the numbers....and thru the numbers and really analyzing the offer is one of the most valuable services you can provide a seller....and thankfully for them , you have !  Good job !

Apr 01, 2012 09:27 PM #3
Rainmaker
710,661
Pacita Dimacali
Alain Pinel - Oakland, CA
Alameda/Contra Costa Counties CA

Dick --- thanks for the kind words

Tim --- that's right. Emotions will always play a part in these negotiations

Sally and David --- we started out with a spread sheet...then discussed the merits of each strong contender.

Apr 02, 2012 03:42 PM #4
Rainer
82,850
Jim McNinch
Trademark Loss Mitigation - Spring, TX
Short Sale Specialist, Texas

"Cash is almost always KING, but not guaranteed!  The highest offer is not always the best buyer.  Good points.

Apr 05, 2012 12:59 AM #5
Rainmaker
710,661
Pacita Dimacali
Alain Pinel - Oakland, CA
Alameda/Contra Costa Counties CA

Jim -- we always tell our clients that cash doesn't always get the deal if the other terms are not acceptable to the seller. In this case, it was really sweeeeet!

 

Apr 05, 2012 05:14 AM #6
Rainmaker
2,190,577
Elizabeth Weintraub Sacramento Realtor Top 1%
RE/MAX Gold - Sacramento, CA
Put 40 years of experience to work for you

One of the things that has greatly improved the qualify of offers I have been receiving is when I reduced my Top 10 Tips list down to 5 short items. Something quick and easy that a busy agent can read, comprehend and act upon. Because I have been receiving offers that meet all 5 -- and they include my list with check marks next to each item! Cash or not, we need those 5 things. If we have 2 cash offers, the cash offer that meets the 5 criterion gets accepted.

Apr 06, 2012 01:55 AM #7
Rainmaker
710,661
Pacita Dimacali
Alain Pinel - Oakland, CA
Alameda/Contra Costa Counties CA

Elizabeth ----

Ooooh...would love to get your tips.

For my short sale listings, I've been fortunate enough that when we require the buyers to open escrow upon acceptance by the sellers and prior to short sale approval, the truly committed buyers agree.

Apr 06, 2012 08:29 AM #8
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Rainmaker
710,661

Pacita Dimacali

Alameda/Contra Costa Counties CA
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