Home Buying in Phoenix>Question Details

Betsy, Home Buyer in Tempe, AZ

How do you get a short sale? We are always told they already have an offer, even if ours is full price and cash.

Asked by Betsy, Tempe, AZ Thu Sep 8, 2011

I hear that banks often compare offers on a short sale, yet we have been told that the bank already has an offer so the property is not available. This was only 3 days after the property had been listed. How do we get to make a back up offer, or possibly a better offer? It also seems that when our agent calls, the deal is done. Yet if we call the listing agent directly, then maybe he could make a backup offer. Seems a little fishy. Can a listing agent legally ignore offers because they come through a another agent?

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BEST ANSWER
Hi Betsy,

I completely understand your concerns. Depending on the area and price range you are considering a purchase, the market has heated up over the last few months. When you are submitting your offers you might want to submit your offer over asking price. Also, being in a back-up position is not a bad position since most of the time the first buyer will back out for some reason or another. You would just submit an offer to the listing agent and they will hold your offer in back-up position. Once the first buyer backs out, then most of the time you will just slide right into first position to purchase the home. You are not the only one having these issues and a lot of other buyers are submitting multiple offer when they are only planning to purchase one home. Legally, the listing agent is required to submit all offer to the seller even if the seller has already accepted another offer. Just submit an offer on the home you like and just sit back to see what happens. In the mean time, submit more offers until your are the first runner up to purchase.

Please let me know if you need any help with your home purchase.

Sincerely,


Sean Heideman, Realtor
E-Certified, SFR Certified
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1 vote Thank Flag Link Thu Sep 8, 2011
Betsy

Jim gave you the best overview of the process and I use a similar process on short sales of sending only one accepted offer to the bank. I do my best to get the best offer and to give all parties the opportunity to increase their offer when multiple offers are received but am often met with skepticism from the buyer's agent. I believe banks are holding back their inventory in an effort to cause prices to rise. But if Fannie and Freddie follow through on bulk sales in Arizona, we may yet again see another wave of properties and a continued depression of property values. Nobody knows so this is just my opinion.

One strategy I can recommend is to let your agent know if you are willing to allow your offer to be held as a back up offer. I hold offers and if the current transaction falls through, I call all the previous offers who asked to be a back up offer and I call in order of the best to least. This has worked on multiple occasions for my client's benefit in winning a property after the initial offer fell through.

If you have an agent, talk to your agent. The Listing Agent works for the seller and you will get the best deal by having an agent submit your offer. It is through the negotiation process of offer/counter that they best price and terms for the property is achieved.

I hope this is helpful.

Fred Shocklie
Owner and Real Estate Consultant
MoreChoices Real Estate LLC
602-330-1840
Web Reference: http://www.morechoices.net
1 vote Thank Flag Link Thu Sep 8, 2011
Betsy,
Getting your offer accepted in a short-sale scenario depends on a few factors.

First, make sure your agent provides all necessary documents including, clearly written contract, pre-approval letter and any additional documentation the listing requires. It sounds like your agent is working hard for you but running into an invisible wall in regards to timing and submitting back-up offers. Many times homeowners are fighting the foreclosure clock and want to get the short-sale completed before their house is sold at auction. If the listing agent continues to submit offers it can slow down the process.

Second, make sure the property you are making an offer on is an "approved" short-sale. This means that the homeowner has already submitted a financial package to the bank and the bank has approved the property to be listed as a short-sale. Additionally if there is more than one loan on a property all lien holders must approve the short-sale.

And finally make sure your agent is in constant contact with the listing agent. Withdrawals are very high due to the long time it takes to complete a short sale transaction. Listing agents specialize in short sales too, so it is possible that the listing agent might have other properties coming on the market.

You may want to ask yourself why you are focusing on short-sale properties. If you're looking for a great deal, you may in fact have better luck buying a Real Estate Owned (REO) property.

Best of luck to you.
0 votes Thank Flag Link Thu Sep 8, 2011
Time is of essence. Once a listing hits MSL, your agent needs to contact the listing broker to ensure the listing is still available with no offers received. Once this takes place, your agent is to immediately contact you to view the home and if you like it, your agent needs to write the offer on the spot. Most agents carry laptops with attachments for signature so the offer and related documents can be signed on the spot. If your agent is not connected to the web, he/she should immediately find a location so they can transmit the offer and documents to the listing broker.

Today in the lower price points homes hit the MLS and are sold within hours, if they are priced at market value.

Good luck and if I can be assistance I will be happy to assist you.

Milly Casas

Milly Sells AZ
Web Reference: http://www.millysellsaz.com
0 votes Thank Flag Link Thu Sep 8, 2011
Time is of essence. Once a listing hits MSL, your agent needs to contact the listing broker to ensure the listing is still available with no offers received. Once this takes place, your agent is to immediately contact you to view the home and if you like it, your agent needs to write the offer on the spot. Most agents carry laptops with attachments for signature so the offer and related documents can be signed on the spot. If your agent is not connected to the web, he/she should immediately find a location so they can transmit the offer and documents to the listing broker.

Today in the lower price points homes hit the MLS and are sold within hours, if they are priced at market value.

Good luck and if I can be assistance I will be happy to assist you.

Milly Casas

Milly Sells AZ
Web Reference: http://www.millysellsaz.com
0 votes Thank Flag Link Thu Sep 8, 2011
Hello,
It depends which part of the valley you are looking to buy and in what price range. I help many of my clients buy short sale properties..In fact I just helped one of my Buyer client close on it. I have been ni Business for 9 plus years and would love to help you.
Sincerely,
Mamta Jain
Realty One Group, Inc
602-361-9292
azdesertliving@hotmail.com
0 votes Thank Flag Link Thu Sep 8, 2011
Hello,
It depends which part of the valley you are looking to buy and in what price range. I help many of my clients buy short sale properties..In fact I just helped one of my Buyer client close on it. I have been ni Business for 9 plus years and would love to help you.
Sincerely,
Mamta Jain
Realty One Group, Inc
602-361-9292
azdesertliving@hotmail.com
0 votes Thank Flag Link Thu Sep 8, 2011
Betsy,
A lot of good answers below.
To make a successful offer, you have to be aware of the market trend.
In Tempe, the inventory of available homes is going down - we can feel it.
I just checked the supply/ demand indexes for September 1, 2011 on the Cromford report for Tempe:
Supply was at 97, and demand at 139.

Good luck.
Steffy
Web Reference: http://www.talktosteffy.com
0 votes Thank Flag Link Thu Sep 8, 2011
Betsy, typically when an agent lists a short-sale the seller's lender wants to see only ONE 'seller-signed' (accepted) offer (contract), not 'multiple offers' that are unsigned by the sellers.

What I'm about to say still confuses a LOT of agents AND buyers out there...but...in a short-sale, the owner selling the home still owns the home, regardless if they are in a 'short' (underwater) position on their mortgage and/or if they are months delinquent on that loan. THEY choose the best offer (usually the highest NET) to send to the bank after receiving counsel from their listing agent.

I've been listing and buying short-sales for over 4 1/2 years, and when I'm the listing agent I only send ONE 'seller-signed' offer to the seller's bank for review, which is how it should be done. This was argued back and forth a few years ago when some agents would send offer after offer to the seller's lender, thus leaving the choice of which offer to choose up to a bank negotiator who is really overwhelmed and should not be put in that position.

I think you'll find most short-sale listing agents conducting their short-sales in the same manner as I do, which is to send in the best offer to the seller's lender for review and keep everything else in a 'back-up file' in case the buyer walks away.

The main point of logic behind this is the seller can only sign and accept ONE offer; they (sellers) cannot sell their home to more than one buyer, which is a legal tightrope IF they sign more than one contract.

Here's a good example that might explain it a bit better:

:: A nice home is listed as a short-sale in a good neighborhood at a fair price, let's say slightly below market value at $100,000.

By the second day of the home being on the market, the listing agent has received 4 offers. She will then take those 4 offers to her client, and together they'll look at each one of them and determine which one will (a) net the bank the most amount of money, (b) close the fastest with the least amount of hassle, and (c) have the most qualified buyer.

They'll then choose what they think will be the best offer and the seller will sign it, effectively 'accepting' the offer (pending their lender's review and/or approval), and together with their 'short-sale package' of financial information, it will be sent to the lender with a NET sheet (an estimated HUD-1 from the title company), and the wait begins.

What happens to the other 3 offers, you ask? Well, the best course of action is for the listing agent to communicate back to each of those buyers that their offer was not accepted, and that they'll be kept in the listing agent's file for that property, and should the primary offer cancel or withdraw for any reason, the listing agent will reach out to those buyer's agents and ask if they are still interested in the property.

I hope that answers the first part of your question.

As for you (the buyer) calling the listing agent directly when you're already working with a buyer's agent, I wouldn't recommend it. If you have built a relationship with an agent who has represented you properly by presenting offers on short-sales, then you should go through him/her to communicate to the listing agent. Calling the listing agent directly will only lead to mistrust and problems with your agent who is supposed to be representing your fairly and efficiently in their course of doing business with you.

That being said, if you feel like your agent is NOT being up-front and honest with you when it comes to submitting an offer on your behalf, you should bring it to their attention immediately. My guess is that they do have your best interests in mind and it's likely just a 'communication breakdown'; they might have no idea you feel frustrated about the process unless you bring it to their attention and discuss it openly.

Keep in mind, our market right now is HOT-HOT-HOT! I'm seeing multiple offers on ALL of the nice homes out there that me and my buyers are looking at.
If you're not viewing a good home within Day 1 or 2 of it being listed, you'll likely miss out on the best opportunity to purchase it and you'll be stuck competing against several other buyers that have already submitted offers.

Hope that helps clear things up a bit!

Jim Mitchell
Century 21 All Star, REALTORS
Cell: 480.231.6769
jim.mitchell@century21.com
0 votes Thank Flag Link Thu Sep 8, 2011
I can get you in one of them.........Call me and I'll let you know the strategy.

Neil Brooks
Realtor
HomeSmart
602-574-1111
neilbrooks@cox.net
0 votes Thank Flag Link Thu Sep 8, 2011
Typically the seller and their agent will review all of the received offers and select the best one that they feel will get approved and successfully close the sale. Then only sent that one offer to the seller's lender for approval.

The Phoenix metro market is very competitive right now and when nice homes come on the market they receive substantial activity and in most cases have multiple offers.

You always have an option of leaving an offer in back up position and this may be a great alternative for you since most of the initial short sales buyers walk by the time the approval is received.

There are several other options for you to consider that an experienced agent will be able to advise.

There are also some real estate agents that don't like to do short sales and will provide excuses to avoid getting involved in a short sale.

Best of luck!
Web Reference: http://www.jameswehner.com
0 votes Thank Flag Link Thu Sep 8, 2011
It sounds like the Phoenix market is just heating up and the good deals are going quickly. You need an agent working for you who is giving you the attention you deserve. While I don't deal in Short Sales myself, I have heard from agents that are doing them that the banks are now refusing to accept multiple offers on Short Sales and Foreclosures and are only dealing with one offer at a time. Not sure what else to tell you except, keep trying. One of these times the deal will stick.
0 votes Thank Flag Link Thu Sep 8, 2011
Many of the homes listed for sale on trulia are actually already on contract. If you know of a specific home you like, I can tell you if it is under contract or not. It seems that houses under 150,000 are all getting multiple offers right now too.
0 votes Thank Flag Link Thu Sep 8, 2011
There is no reason why you shouldn't be able to make a back up offer. Your agent needs to ask if and how many back up offers there are. If there are none or only 2 or 3 you should submit one. I don't know any reason why a seller or listing agent wouldn't want that. Maybe your agent needs to be quicker in finding listings or more agressive or interested in pursuing a deal?
0 votes Thank Flag Link Thu Sep 8, 2011
How to get a Short Sale? Excellent Question. Don't be discouraged if the Home has an Offer, if you're interested in a Short Sale that has an Offer, ask your Agent to write the Offer and submit it as a Back up Offer.
It is possible the other offer may not go forward. As a Back up offer it's a possiblity that if anything shall happen to the 1st Offer your offer maybe considered. CASH is KING. I have a Licensed/Certified Short Sales Agent in your Area that has experience in Short Sales, I would like to Schedule a meeting with you, and the Agent so you do not lose out on any Great Opportunities.

Don Alexander REALTOR(SFR)
1st Prime Realty
619-581-4255
http://www.DonSellsSanDiego.com
Ca.Dept.Real Estate Lic.01456248
Email: buyersellersagent@yahoo.com
0 votes Thank Flag Link Thu Sep 8, 2011
Eric G Maughan
Agent
Phoenix, AZ
..BEST ANSWER
The way to get one is to pick an area your interested in, have a realtor (like me, just sayin) send you the homes as soon as they hit the market. then be one of the first to make an Offer. but also it is important that your realtor knows the process of getting a short sale done and that He can talk with the agent who is listing the property because if the listing agent does not know what he is doing it is pointless to make an offfer since that agent will mess the deal up and you will again be frustrated..

you may also consider an REO(bank owned property the strategy to buy one is slightly different and the homes are usually needing a little more work but they are usually at a good price as well.


I know what I am doing and would lonve to help you.
0 votes Thank Flag Link Thu Sep 8, 2011
Betsy,
Buying a Shortsale can be a frustrating process. The process: Home is listed for sale then the purchase offers come in, sometimes one, sometimes many. The Seller(homeowner) then decides which offer to accept. That offer, along with all the other information the bank will need to review the situation, will be submitted to the bank. The Bank will then either accept, reject, or counter the offer. if they accept its a done deal if they reject/counter it opens the door for a backup offer.. A back up offer comes in play when the bank rejects the first offer because it is just too low. If the Realtor has received Backup offers on the property he can pull one of these out and send it to the bank as a substitue for the one that was rejected, of course this backup offer must be reasonble for the bank to accept. some agents send multiple offers to the bank as if the bank will pick the best one, but this will muck up the process and likely Kill the deal. then everyone involved is frustrated
Many many investors are putting offers on every shortsale that hit the market as soon as they hit the market, these are usually low offers.... continued in the next answer....it won't let me keep talking
0 votes Thank Flag Link Thu Sep 8, 2011
It's a tough market out there and the better the deal the faster they go! Short sales are a little more involved and they require approval from whomever holds the note. A property can be held in limbo by an accepted offer between a buyer and seller until the bank reviews the offer and decides to accept, reject, or counter. If they are taking back up offers you may have to wait a significant amount of time before the first offer is accepted or rejected. My best advice is to stay on top of the homes that come on the market. See them as soon as possible and make your offer immediately! Good luck!

Christopher Grace
Lund Realty, LLC
602-717-3706
0 votes Thank Flag Link Thu Sep 8, 2011
Short Sale definition= Waste of time
0 votes Thank Flag Link Thu Sep 8, 2011
Could it be that the Market is heating up?

We are seeing a lot of multiple offers, and, from what I hear, Phoenix is a Hotbed!

There are still a lot of Investors out there, and speculators, and Families, and First-Time Buyers.
You may have to submit 5 Offers to get one accepted. If you are giving "Low-Ball" offers, you will submit 10-20 Offers to get one.

Don't worry about how many Offers they SAY they have, Nor whether they are sitting on some; it doesn't matter to you, the answer is still NO! Move on to something that you can have.

Good luck and may God bless
0 votes Thank Flag Link Thu Sep 8, 2011
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