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!
Wendy Rulnick, Broker, Rulnick Realty, Inc.
Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or local 850-650-7883 ext 204
Email Wendy: [email protected]