A reporter for Investor's Business Daily quoted me as a reliable source in an article about mortgage fraud. She chose a statement that needs repeating: "A short sale is a privilege; it is not a right." No government authority is forcing banks to do a short sale. Banks grant a short sale because it makes sense to the bank to do it. If a bank can save 20% to 30% by doing a short sale over foreclosing, it will most likely choose the short sale.
But the bank will want what it perceives to be market value. Whether its perception is based in reality is fodder for another rant some other day. I can say that after doing short sales for 6 or 7 years, as a Sacramento short sale agent, I have a pretty good handle on what a bank will want. I see it time and time again, especially when the bank counters a price that matches my list price.
On one such Sacramento short sale, I had to listen to an agent scream her bloody fool head off because my seller would not entertain her buyer's offer. She could not believe that a seller would reject her buyer's offer. I was driving down Business 80 listening to her shrill voice. She felt her buyer's offer was priced correctly. I disagreed and, by extension, my seller disagreed. Because the sold comps and pending comps supported the list price.
Sure enough, we're in escrow now with a more reasonable buyer and the bank says it wants our list price. No surprise there. This happens over and over and over.
In another short sale, we received 4 offers over the past 10 days. The first offer was $10,000 higher than list price and all cash. However, that wasn't a real offer. When we asked the agent to follow MLS directions, to read the attachments and to resubmit the offer, he vanished, like many of that sort do. The second offer was at list price but that agent, again, did not follow MLS instructions and, when asked to do so, also disappeared.
That's par for the course in Sacramento these days, I hate to report. It's a sorry state of affairs. My sellers are somewhat skeptical when I tell them to prepare for it, but then they see it with their own eyes as well. I send all offers received to the seller, even the bogus ones; I'm required by law to do that. It's astonishing what goes on in the market. No wonder so many other agents are struggling with their short sales when this kind of crap is allowed to happen.
Then, finally, we received two full price offers written by experienced and competent real estate agents. One involved a very small loan, the other was cash. Multiple offers, the same day. The seller accepted the cash offer. I hear the cash buyer was reluctant to offer list price but finally listened to the buyer's agent, and now this buyer is in escrow. If that cash-offer price had been below list price; however, I predict the seller would have accepted the other offer. We don't care where the cash comes from because it's always all cash in the end.
Do I have reason to believe the bank will accept this all-cash offer at list price? Absolutely. I would base my reputation and 35 years in the business on it. Is this a good deal for the buyer? You betcha. That's what we call win-win.
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Certified HAFA Specialist
Sacramento Real Estate Listings
Elizabeth Weintraub is an author, home buying columnist for About.com, a Land Park resident, and a Land Park real estate agent who specializes in older, classic homes in Land Park, Curtis Park, Midtown and East Sacramento. Weintraub is also a Sacramento Short Sale agent who lists and successfully sells short sales throughout the four-county Sacramento area. Call Elizabeth Weintraub at 916.233.6759. Put 35 years of real estate experience to work for you. Broker-Associate at Lyon Real Estate. DRE License # 00697006.
The Short Sale Savior, by Elizabeth Weintraub, available with free shipping.
Lyon Real Estate is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan. Photo: Unless otherwise noted in this blog, the photo is copyrighted by Big Stock Photo and used with permission.The views expressed herein are Weintraub's personal views and do not reflect the views of Lyon Real Estate. Disclaimer: If this post contains a listing, information is deemed reliable as of the date it was written. After that date, the listing may be sold, listed by another brokerage, canceled, pending or taken temporarily off the market, and the price could change without notice. It could blow up, explode or vanish. To find out the present status of any listing, please go to elizabethweintraub.com.
If this post proves anything, it says boldly and clearly...call Elizabeth to get a short sale done right now
I absolutely agree that should a bank choose to allow a short sale, they're going to want market value - otherwise, it really doesn't make as much sense for the bank to move forward. Thanks for the blog; this is useful information!
Hi Richie: I wasn't meaning to pound my own chest but to get across the point that list price has a bearing on the short sale if it's priced correctly. Cuz that's what the bank will take. A price supported by comps. There's nothing really magical about it.
Hi Kat: That's the part people don't stop to consider. This is not a foreclosure. In some instances, in fact, the sellers are still current. Only a fool would believe you can offer a seller who has no intention of selling 50 cents for an item worth at least a dollar.
Solid view of short sale offers in your area of Sacramento Elizabeth. of course banks and sellers want market and why do all buyers think they can steal your house? No one will take them seriously. The disappearing cash buyers and agents is weird. Now you would think you could talk to agents but I know they hide as well as the best of the public sometimes.
You mean banks aren't giving properties away because it's a Short Sale? I hear so many agents arguing the fact that a home is a Short Sale as reason why market value is justified. It drives me nuts.
Elizabeth - We have a listing. 6 times we would try to do the short sale and each time the bank would counter higher than what you can buy without a short sale, and the buyer would walk away.
We never had a counter for less than $72,500. Recently there was a sale for $65K. We did not have any poffers, so we changed the Listing price to $65K. I have in the remarks that this is what we hope, not what we guaranteed to get. Get a call fromthe agent, explain the situation, and get an offer for $52K.
When the offer is rejected, the agent calls me and asks why...
Hi Gary: The vanishing buyers are a bit odd in that they must think they can buy a home without conforming. I wonder where they get that idea? Oh, yeah, in part from their agent, no doubt.
Hi Chris Ann: Usually after losing out on a few homes, buyers catch on and figure out what they need to do or they drop out of the market. Either way the agent is put out of her misery.
Hi Jon: I feel your pain. Unless we are up against an auction date with the clock ticking, I typically advise my sellers to stay clear of lowball offers.
Your advise is the best under the circumstances. If you do not have time, and the foreclosure is just a couple of weeks away, it is an attempt. Doing nothing is still worse. But if there is still some time, signing with low ball deals could end up in foreclosure later anyway.