With as many as 25%-30% of the real estate market consisting of short sales, I have found that realtors consistently make 3 mistakes when handling them. Here are the 3 scenarios:
Scenario # 1. A second offer comes in 1-2 days after the first one for more money. Some realtors submit both offers to the lender...DON'T DO THAT ! Instead, if the first offer is signed by the seller, then submit that one. If the first offer has not been signed by the seller, then pick one and submit that one. By presenting 2 offers to the lender of lenders if there is a second, will only "muddy" the water and thus make the time for approval longer.
Scenario #2. A seller receives a 2nd offer, for $10,000 more, about a week after you submit the first signed contract to the lenders. The seller now wants to cancel the first and accept the second offer and have you submit the 2nd offer to the lender...DON'T DO THAT ! Not only will this lengthen the time for the lender's approval of the short sale, because basically their review procedures will probably start back at the beginning, but the seller has a signed contract with the first buyer. This could open you and the seller up for a law suit. If the first buyer backs out after the lender's approval, then you'll have a back up offer for more money, or at least you'll know what the lender will accept, which will speed up the new approval process.
Scenario #3. Commissionechtomy from the lender. Does the buyer's broker have to reduce his commission offered to him in the MLS? No...DON'T DO THAT ! Instead, as the seller's agent, adjust the total commission on the listing agreement, with the seller's approval at the time that you know that the listing will be a short-sale. I have done this twice this year and received 6% and 6.5%, respectively.
I hope this helps clear some consistent problems that occur in the handling of short-sales.
Jack "Doc" Holliday, MBA, GRI is a realtor, serving Fountain Hills, Scottsdale and Phoenix, Arizona.
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