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I recently went to another state to look at homes......a city that has tons of short sales and forclosures. We thought we would buy now and in three years move in the home. We found a home that was a short sale and the low price attracted our interest. (135,000 when brand new they are building the same home for 221,00) We offered a higher amount as the real estate agent that listed the home said there was 5 other offers so we offered 161,000. Anyways I thought that they would only tell you if you were the highest, however our real estate agent said sometimes the bank will take the top three highest and if those offers are not high enough they will ask them to submit higher offers. Is this true? Does it depend on the state? I hate not knowing if we were high enough, but I am trying not to get to emotionally involved with it, so if we arent I can move on and find another house.
I only send in the best offer, and any other better offers - but not until the seller's lender has completed a BPO or an appraisal.
How do you determine what the best offer is? Could be more than just money. Also, my understanding is that in Colorado real estate agents must present all offers the sellers regardless.
How do you determine what the best offer is? Could be more than just money. Also, my understanding is that in Colorado real estate agents must present all offers the sellers regardless.
All offers are given to the seller in a short sale situation; up until closing.
The best net to the lender is forwarded on to the lender, after the first one.
Sometimes the lender takes so long in deciding, the forst, second or even third buyer is long gone.
All offers are given to the seller in a short sale situation; up until closing.
The best net to the lender is forwarded on to the lender, after the first one.
Sometimes the lender takes so long in deciding, the forst, second or even third buyer is long gone.
2B...don't think so. Some may be given to the seller...some may not. Sometimes the seller is not even in the act. There are so many variants I refuse to project what will take place. I suggest not even trying to explain what happened afterward.
Sometimes the best net goes to the seller. Sometimes the lender comes back with what lender will take even if it is less than the offer. Then you counter what the lender wants.
I do agree that patience is a big virtue. Hang in there and one or more will come your way. But it may take months.
I see no evil in having a half dozen short offers out. On naked shorts I would expect the odds are less than one in ten.
To the OP. High down payment is a plus...but only when it is mostly resolved. So it will help if you end up in a competitive situation with some one else.
When I get offers on short sale listings, they get signed by the sellers then submitted to the lenders for consideration. I submit them all. I have a general thought as to what a negotiator will do but the process takes time and other that to state a fact from the negotiator, I say nothing. Most negotiators are overwhelmed with paperwork these days. One we spoke to this week says their company has 12,000 short sale homes to be evaluated and not nearly enough manpower to do it! If the negotiator turns down an offer, they usually tell you what they will accept. Personally, I just put that in the listing so everyone knows.
Recently, I did exactly that and the next offer came in the next day and was 20% lower! I knew it would not be accepted but the law says I must submit it and that is what I did after letting the buyer's agent know that the last few offers were higher and rejected! His client is tied up until the lender responds! But he is doing his job, that is what the client offered. In that case, I did have the buyer sign that we were continuing to market the listing and accept offers. That should have been a big clue to the buyers agent!
I have another that was counter offered 20K higher, the buyer raised his price by 5K. It will be rejected since it is so far from the lenders bottom line, but the buyer has the right to make the offer, the seller has the right to have the offer submitted.
I could go on and on but here is what I say: Buyers, if you are negotiating a short sale, make sure you and your agent understand the process and that your agent can keep you out of a bidding war. Put in your highest and best offer and be patient. Be aware that lenders only care that the number makes sense based on the BPO or appraisal and that they are getting the most they can get for their stockholders. If someone comes in with a bid that is a net of a dollar higher, they will get the bid! Also, don't ask for so many concessions. Also, the cleaner the offer, the better you are. If the seller's agent tells your agent the bank wants a specific number, and if you insist on putting down the minimium and asking for closing cost help, add it to the price! Lender's will approve seller concessions if the offer justifies them. However, if you cut the price by a big amount, then ask for 6% concessions, you could be wasting your time.
The backlog is partially caused by buyers wanted to offer so much less than what the lender approved for the short sale. When then happens, the negotiator just waits for more offers to get the best one and the buyer is tied up until they eventually pull out.
Buyer's can pull out at any time if the lender has not responded! So if you are tired of waiting, just withdraw the offer and move on.
There are lots of houses on the market in most markets to choose from. If you are patient, you will find a house that works for you at a price that fits your budget!
I wish the listing showed what the bank wants so I can just put that number down, and not play msuical offers for such a period of time. The listing agent told my buyers agent that there were offers 10% higher than mine. Is this a bluff to stretch me out for a higher offer, or is this true? Is this a clue to my clueless agent that 10% more is what the bank wants?
Make your highest and best offer where you know you will be able to still get a bargain. Give the bank a specific time to respond, such as 2 days from now at 5pm. Tell the agent to let the listing agent know that you will walk at that time. If you don't have an answer by then, you're free to walk. Don't contact them again. If later they decide they want to accept your offer, they will contact you. Since your offer is already off the table, you can ignore them, or you can accept their acceptance. Or you can counter back, telling them that your offer was off the table, and now you are only willing to pay x amount. That's risky but you can do it.
Don't get emotionally involved with one house. Keep looking and making offers. You can have a dozen offers out on short sales and REO's. If one gets accepted and you decide you don't want it, just tell the agent that you inspected the house again and it doesn't pass your inspection.
I'm thinking of improving my 2nd offer (which hasn't been answered yet) to my highest and best and hope for the best. I don't have time to sit and wait. I am willing to wait if I know I will get it, but to wait so long haggling and waiting to still not get it would get me going postal.
I wish the listing showed what the bank wants so I can just put that number down, and not play msuical offers for such a period of time. The listing agent told my buyers agent that there were offers 10% higher than mine. Is this a bluff to stretch me out for a higher offer, or is this true? Is this a clue to my clueless agent that 10% more is what the bank wants?
Initially, in the listing, we don't know what the bank wants. We must list at fair market value. After we get an offer, if the offer was rejected, the negotiator normally tells us what they want.
I put that information in the remarks section in the MLS and change the listing price to match what the bank)s) want. I have a listing where I recently stated, "The listing price was approved by both lenders. Full offers can close quickly." I got an offer 20% lower with a request that the seller pay % closing costs! What a waste of time. While awaiting signatures, another contract came in at full price, no seller concessions. That contract was verbally approved by the lenders while I waited for the seller's signature. The negotiators said they'd send updated approvals when they get the signed contract.
When representing the buyer in a short sale, I call the listing agent and feel them out. I want to know where in the process they are, if the lender has reject any offers and if the price is approved. Most of the time, I can tell if they are experienced at handling the short sale or not buy the information they give. If the listing agent is not used to handling this type of contract, I don't show the property. It's easier to walk away at that point that to obligate my buyer to tie up funds and time for a property where the process is no where close to being done.
Handling short sales or buying short sales is not for everyone. They are tedious and time consuming and often frustrating. Often negotiators are as bad as sellers in placing too high a value on a property. For those who pursue these types of sales, there can be some decent deals out there if you look for them.
Last edited by Dee2e; 09-09-2008 at 04:38 AM..
Reason: Fixed a typo.
Initially, in the listing, we don't know what the bank wants. We must list at fair market value. After we get an offer, if the offer was rejected, the negotiator normally tells us what they want.
I put that information in the remarks section in the MLS and change the listing price to match what the bank)s) want. I have a listing where I recently stated, "The listing price was approved by both lenders. Full offers can close quickly." I got an offer 20% lower with a request that the seller pay % closing costs! What a waste of time. While awaiting signatures, another contract came in at full price, no seller concessions. That contract was verbally approved by the lenders while I waited for the seller's signature. The negotiators said they'd send updated approvals when they get the signed contract.
When representing the buyer in a short sale, I call the listing agent and feel them out. I want to know where in the process they are, if the lender has reject any offers and if the price is approved. Most of the time, I can tell if they are experienced at handling the short sale or not buy the information they give. If the listing agent is not used to handling this type of contract, I don't show the property. It's easier to walk away at that point that to obligate my buyer to tie up funds and time for a property where the process is no where close to being done.
Handling short sales or buying short sales is not for everyone. They are tedious and time consuming and often frustrating. Often negotiators are as bad as sellers in placing too high a value on a property. For those who pursue these types of sales, there can be some decent deals out there if you look for them.
Too bad you are not in NY. I would definitely use you to help me. How can I get around being stuck with an inexperienced buyers agent who is kind of pushing me to see other houses instead, meaning they don't want to be bothered with an overwhelming, maybe deal, such as a shortsale. This agent is the broker too, so going there won't help. I didn't sign a disclosure with the agent, but dumping him is asking for legal trouble I would think.
I'm thinking of improving my 2nd offer (which hasn't been answered yet) to my highest and best and hope for the best. I don't have time to sit and wait. I am willing to wait if I know I will get it, but to wait so long haggling and waiting to still not get it would get me going postal.
If you don't have time to sit and wait DON'T do shorts.
Changing your offer is likely pointless. They are not sitting there contemplating your offer. They will not in fact even look at your offer until they decide they are interested in a short sale. Then the evaluations of the offers will take 20 minutes and something will happen.
Note that most shorts fail.
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