Why would the seller haggle with a potential buyer when they have no idea what they are haggling for?
Submit the offer to the bank.. The seller has MINIMAL say or control, and the point is to sell the property as fast as it can go.
I learned this on the first short sale I was involved with.. the other agent came in $95,000 under asking price.. the seller was all upset, I was leery and said.. hhmm.. I'm not too sure about this, to which the other agent said.. hey, what do YOU care? let the bank decide... and guess what? The bank ran their numbers and took the $ within 4 days and closed three weeks later. Done. Same result as if the seller got all insulted and tried to negotiate for the bank.. Why make the hassle? GET THE OFFER TO THE BANK.
Even if the seller has more than one loan, there is still an answer to await from the bank(s) and yes, short sales with more than one loan are also presented to each bank by the sellers attorney. It is still up to the banks to accept or deny the proposed payoff of each respective loan. So all offers should be sent to the banks to decide what is acceptable, low or not.
Yes, technically, the seller owns the home. But, in the real world of real estate short sales, the homeowner is usually at the end of the rope and the reality of not having a say in what is an acceptable offer is the real world. These people are looking for help.
The seller has no say in what is an acceptable loss to the bank (s) that they owe. The bank(s) decides what is acceptable. For the seller to not forward all offers to the bank, The seller will delay getting out of the property by NOT submitting the offers to the bank for review.
Letâ€™s stay in reality here for a minute, people that are looking to buy short sales are circling these properties waiting to buy a good house at the benefit of another personâ€™s loss. We are not seeing full price for these short sales.. we are seeing people bidding 30, 40, 50% under list price because they hear it on TV that they can. Usually the sellers just want out of the property and will gain nothing by not submitting all offers to the bank (s).
The bank will run the offer numbers versus the waht the cost of the sale will be and decide wether or not the choose to incur the loss. Then the bank will tell the listing agent to change the list price to the bottom line number.
There will be no counter or negotiation and the seller does not have a say in what to accept. All offers, low or not are to be presented to the bank for a yes or no answer. The statement below that the seller negotiates the accepted offer is wrong, the seller wants to get out of the property.. hence the short sale and has no say in the accepted offer price.
Sure everything is negotiable, but with the process going through a bank, it is not like a normal negotiation, it takes time and if someone comes in higher then you.. then you are out.
You can play games with it, sure, but the bank wants to get paid and you may get knocked out of the game without even knowing it once a higher offer comes in and then it is too late. Although banks do not want to own the property, they aslo want to get paid and there is not much room for games.
Yes, they simply aprove or disapprove.. until a higher offer comes in. Then you are out.
Maybe you should post a separate question to see what they say.......of course, instead of consumers, you will probably get agents answering for them!
Now I guess my answer is on top!
While it used to annoy me as much as it obviously does you, I have come to appreciate that sometimes we all miss one. And so when I see it happen, I generally just move on to the next question, rather than reprimanding the poster. But may just be a difference in our style.
It's over and out for me on this thread....
I have conditioned myself to CHECK the date first....and also READ some previous comments....AND, if there are already 20 or 30 or 50 responses, unless it's a topic open for sharing opinions, I will usually pass and not even bother.......even if it's a current question it amuses/annoys me to see agents repeat , sometimes almost verbatim, what has already been said in the last several posts.
Since this is an old question, way past its prime, my question won't interrupt the flow of responses.......I wonder - do agents read prevous posts and not care if they are repeating for the umpteenth time what has already been said..........or are they just too interested in seeing heir words and photo on a post, and don't care...or don't they bother to see what some have already written???
I am curious.........
What do you all think?
What is the goal of repeating, even if paraphrased, what has already been said??
Have a good day all!
No real rules, but what I am finding is this - generally banks are looking for closer to market value than they may have been previously. I think part of this stems from the banks getting the process more under control so it is not such a free for all. I heard from an agent that does many short sales in the Philly area, and he said that he pushes back on offers that are outside of the 90% of market value range.
Unwavewring Commitment to Service, Unsurpassed Results
Will the banks counter? Absolutely!!
Will their counter be wrong if the BPO agent they sent out does not know the area? Heck yes!
Can this BPO be challenged and a new one ordered? Yes!!
Can you escalate to senior management to have this re-evaluated by someone who can actually make a decision? Yes!
Should you ever submit more than one offer to the bank? NEVER.........backup offers are strictly that, BACKUPS....and they should not be signed either in my opinion. Only if the original offer falls apart should you move to the next offer in line.
The contract/agreement is between the buyer and the seller. The lenders approval of the short sale is a contingency of the deal. No different than the inspection or financing addendum the buyer will typically put in place.
Make sure you have an agent who first of all knows what they are doing and can explain a strategy to you, and on top of that, will go to bat for you when the lenders start to play hardball and not simply lay down and take whatever the $9 an hour negotiator who cannot make a real decision gives them.
Also, ALWAYS ALWAYS ALWAYS keep in mind, the people you deal with in loss mitigation are called "negotiators" for a reason, they get paid to negotiate with you and get as much money as possible for their investor (some actually get paid for each time they tlel you "no" and get in trouble if they accept your first offer)....
They WILL LIE and tell you things that are not true b/c they can, THEY HAVE NO CONTRACT AND NO FIDUCIARY responsibillity to you, an attorney, or anyone BUT the Seller.....best advice I can give, push back, tell them no and wait them out......Ben Benita, http://www.BestShortSaleService.com
It pretty much seems their standards change from negotiator to negotiator and ultimately from their underwriters who apparently have the ultimate say.
Recently one of my short sales (I represented the buyer) was under contract for oh... 10 months, the bank always kept requesting updated documents, yada..yada... the usual. Then the negotiator wanted us to write a new contract and lower the price! Yes lower the price... Sure!
About two weeks later they denied the short sale because the selllers tax returns didn't have the same address as the house (the seller hasn't been living there for over a year! No mortgage fraud involved)
Well we tried to convey that message to the negotiator (along with the sellers agent) but they just kept telling us. A denial is a denial and you can't change that regardless of the reason and refused to even look at any further proof that would prove that.
Basically short sales are hit or miss and this is the reason why so many people are getting frustrated with them and I'm noticing avoiding them all together unless they have been pre-approved. Meaning another offer where the buyer dropped out of from waiting was finally approved and now the listing agent has a very short window to find another buyer to fill their shoes.
I think that the threads are read by consumers given the varied topics of interest. Not that everyone is going to read this.. but a lot of people looking into short sales will run across the question -and- there will be some modified answers to the old question which could be useful to new, searching for answers consumers.
Now I guess my answer is on top!
That is a modified answer from my 2008 answer.. as the process has changed.
Debbie, It seems to me that most agents do not read the dates. I noticed that new agents just look for their area, like zip code.. and if there is a question they answer it without realizing how old the question is. That seems to happen a lot. But also like Jeanne states, it may be that agent are drawn by content of interest to them.
Know that approvals are also either Tier I, Tier II or Tier III, based on how many of these criteria your offer clears:
Percentage of amount offered compared to amount owed
Percantage of amount offered compared to BPO/appraisal valuation
Percentage of NET offered compared to amount they would otehrwise receive via foreclosure
Meet all 3 of the above, and you are LESS likely to get multiple negotiations (meet all 3 and you have a Tier III approval).
Anyway, too much to get into on here....bottom line, be prepared to negotiate, know PRIOR to tkaing the listing if your Seller iwll bring cash to close, agree to a prom. note, etc. and you will be ahead of the game.
All my best to everyone.
Ben Benita, Speaker, Radio Guest
Author - "Are You More Likely To See Bigfoot Or A Short Sale Approval Letter?" (get it on Amazon)
Office -- 703-754-7551
It's a bold statement to tell everyone who made a post here that they are wrong and then make a statement that "Banks aren't a party to the contract in a short sale"
If that's the case why are all short sales "Subject to" Bank or another 3rd Party Approval?
Banks are very much so a part of the transaction in a huge way, many of them have their own in house negotiators on staff who's job is to negotiate price and terms which are of an acceptable loss to the bank and to ensure a complete short sale package/documents is in their files to examine.
The package is to ensure not only that the buyers offer is acceptable and they can afford it via a pre-approval but also that the seller is eligible according to guidelines to be granted a short sale. This is why they want to see the sellers bank statements, hardship letters, income / expense work out sheets, etc.
That being said, banks have more to do with short sale transactions than give a thumbs up or down to release lien, that is a heck of an over simplification of the process and their interest and playing a role in these transactions.
FYI @ Laudenthal: The only time a 4th party investor's approval is needed is when they either bought the loan on the secondary market or were the investment group originally funding unconventional loans or most commonly found with 100% financing deals as the 2nd 20% loan was a commercial loan funded by investors. These loans are usually offered a few thousand to go away in short sales and usually cause the biggest headaches because if they don't agree to accept a payoff which the 1st lender will determine then the first lender will just foreclose and wipe out the investor all together.
"Please note that when dealing with 'short-sales' properties/offers, you the buyer are working directly with the seller (owner) of the property. Therefore, no 'the bank' does not directly counter, accept or decline any offers. That said, the seller has a monetary responsibility to the bank (note holder) and may have to counter or decline based on guidelines."
Completey wrong. The seller has the no say in what the bank will accept on a short sale property. This is why all offers should just be accepted. Period. This does not affect the seller, the BANK is the one that will decide how much to lose.
This post is a perfect example for buyers. Look for a Realtor that understands the short sale process.
if you are thinking about speaking to a Realtor regarding listing your home in a short sale situation, it is very important that you list your propery with a Realtor that has short sale experience. Otherwise you may decline offers that would be acceptable to the bank.
I have 3 short sale transactions now that have been in wait for over 7 months with regular contacting the bank.
I reapplied for the short sale, got another agent and an offer. It was sent to the bank, who ordered a BPO. The BPO was accepted and the Bank countered $7500 more. The buyer accepted it and the contract addendum was sent to the bank. 2 weeks later, the sale was declined by the loan server server, no reason given.
I asked the bank negotiator why and no answer was given. What do I do now?
I'm not annoyed when new people answer and don't first look to see the age of the post. it's more annoying when an agent who knows they've answered this before MANY times goes on to repeat asked and answered questions NOT at least adding any new useful information. Some people like to hear themselves speak and it can be seen here, they like to see their words types over and over as well.
We all know this happens a lot, for instance some people will reply again just to say good question or good answer. This is not only useless banter but a tactic to jockey's for top position in a thread but adds to the agents # of replies giving them a higher number on their ribbons as if they answered in some useful way.
I just consider it spam, is spam annoying to you?
From the consumers point of view, They're probably lost not being able to locate the real answers to the question and if they get email notifications like I just did, get sick of the new post notifications too.
It's time for me to unsubscribe to this long defunct thread, I'll leave it to the glory hounds to stay on top. The real question answers have long been drowned out in the noise. Talk about beating a dead horse, Give it a rest already!!!
I don't care to get involved in petty bickering which is bound to erupt from this post so I'm unsubscribing now, LATE!!!!
PS. The way this question was worded, it was probably originally asked by an agent with a fake profile anyway.
This question has been asked and answered many times already. PLEASE NO MORE RESPONSES!!!
No idea why (or by whom) these old questions are resurrected.....or why some don't bother to check the DATE before responding.............or, maybe they do, but don't care .
Realize this... the short sale price is set by the listing agent and depends on their competence. If a property is worth $500K and they put it up as a short sale for $300K yes.. they will get fast offers and they will be rejected or countered at 'gasp' above asking price. There are unfortunately many agents attempting short sales that do not have the experience which decreases the likelihood of them going through.
Hope this helps.
Different for different situations.
P.S. if this is a really low offer, the bank may flat out reject.