Reasons Why You Will Not Buy My Short Sale Listing
A Few Reasons Why You Will Not Buy My Short Sale Listing
The problem is further exacerbated because there are an inordinate amount of Realtors who are now listing short sales who have no business doing so!
Having poor seller representation in a short sale is far worse than a traditional sale because the home owner is relying on this person to help them navigate out of a financially difficult time. Without a short sale approval the most likely outcome is a foreclosure which is the very thing a seller was trying to avoid by going the short sale route.As the volume of short sales has grown so has the amount of
Realtors who are looking to cash in. Money all too often gets in the way of
sound decision making.
The code of ethics in Real Estate clearly states that you
should not get involved in a type of Real Estate transaction in which you have
no expertise.
This is the reason why there will be shortsale lawsuits against Realtors! When I am representing a seller in a
short sale and receive an offer from a buyer’s agent, most of the time the
offer will have significant changes that need to be made in order to protect
the seller’s interest.
Below are 8 reasons why you will more than likely NOT be
buying one of my clients short sales if you don’t agree to modify your offer:
Low ball
short sale offer ~ If you think a short sale is an automatic
invitation to submit a ridiculous offer to the seller you might as well not
even bother. The majority of the time you will see my short sales priced right
at market value or even slightly below market.
The property is already a bargain to begin with. Both
buyer’s and seller’s need to understand that once a short sale offer is
submitted to the lender they will be sending out either an appraiser or Real
Estate agent to do a broker price opinion (BPO). The contract price needs to be
within reasonable proximity to market value or the offer will be rejected.
Inappropriate escrow funds ~ In Virginia the typical deposit when buying a home is $1000, or 1% of the sales price.
These figures are of course negotiable but don’t expect you are going to be
putting up two nickels the seller can rub together. The whole point of having
escrow funds is to ensure a buyer does not walk away from the transaction. You
need to have enough funds to prevent that from being easy to do.
Doing
a home inspection after short sale approval ~ This is not in the
slightest bit negotiable. A buyer will do their home inspection up front in the
normal time frame for doing an inspection which is typically 7-10 days from the
offer being accepted. Do you really think we are going to wait a significant
amount of time to get short sale approval and then you are going to be able to
walk because you don’t like the the fact there are no GFI plugs in the bathroom
or the water heater is at the end of it’s life expectancy? Sorry friend it does
not work that way.
If you are buying a short sale and are worrying about losing
$400-500 you shouldn’t be looking at one. Additionally, if there are issues
from a home inspection you can negotiate a possible credit. Once short sale
approval comes the lender doesn’t want to hear about any problems.
As a buyer, the other thing to consider is the fact that you
would be out of the market for months when you could have discovered an issue
that might cause you not to move forward without waiting all that time.
Leaving the purchase and sale signing date until after
short sale approval ~ You are either going to purchase the home or you
aren’t. We will not be waiting until after short sale approval to have a
contract in place. Everything will be negotiated and agreed to up front.
Not getting a financing commitment right away ~
If you are going to purchase one of my short sale listings you will apply and
get your financing before short sale approval. When the lender approves the
short sale they will more than likely ask for a 30 day closing. We will NOT be
waiting to find out if you are able to get financing that quickly or if at all!
Submitting an unrealistic closing date ~ Short
sales should really be called “long sales” because most of the time they take
longer to complete than a traditional sale. If you are buying a short sale you
need to take this into consideration. If you are not committed to waiting then
don’t get involved with a short sale. My short sales on average take about 90
days for short sale approval. The closing date should read “30 days from short
sale approval”. You can not put an exact date when we don’t know when it will
be!
Not agreeing to wait 90 days for short sale approval ~
The buyer we will be looking for is going to be committed to the property. If
you think that you are going to find your self restless 5 weeks later because
we don’t have an approval yet then a short sale is not right for you. Don’t
forget you are purchasing a home that is probably a pretty decent value. It is
worth the wait! It clearly would not be in the best interest of the seller if a
buyer bailed on the transaction a month or two in and they had to start the
process all over again.
Asking
to take over the short sale because you are an investor ~ Sorry my
friend if you are an investor please feel free to make a realistic offer but
don’t think you are going to take over the negotiations with the lender. Don’t
think you are going to make a low ball offer and the seller is going to accept
it while you look for an end buyer to sell to and make a handsome profit. No I
don’t think so! The seller hired me to complete the short sale. I don’t feel
like defending myself in court on why I let an investor take over the
obligations I was hired to perform.
Folks these are the kind of things that go on every day in
short sales because seller’s do not do their home work in picking a short sale
Realtor to work with. Don’t make that mistake. When you need to short sell your
home do your research and hire a pro! These are all great reasons to reject
short sale offers.
Who you work with to complete your short sale will have the
greatest impact in helping you reach your financial goals. Completing a short
sale remains a much better alternative than letting a property go to
foreclosure for a number of reasons centered around credit and your ability to
buy another property in the future.
I am successfully completing short sales through out the
Central Virginia area. I work hand in hand with a local short sale Real Estate
attorney who knows how to get short sales to the closing table!
Author Bio: Rob Alley earned a bachelors degree at Virginia Tech, in Blacksburg, VA in Biology. Rob Alley has been licensed for 6 years, he and his team of 4 agents consults with homeowners regarding Real Estate transactions and speciliazes in listing and selling Central Virginia Real Estate - Charlottesville, Louisa, Orange, Lynchburg, Nelson, Fluvanna, Amherst, Bedford, Campbell, Lynchburg, Waynesboro and Augusta. Realtor/Owner of Virginia Real Estate Solutions at RE/MAX Realty Specialists
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