Tuesday, August 12, 2008

How "Not" To Buy A Short Sale

Yesterday I received an offer on a Short Sale listing in Destin Florida. The list price was $216,000, a bit below market, and the house had been for sale for over five months. An agent produced an offer for $175,000 and it was contingent on seller's lender approval within 45 days. It also stated "The buyer has the right to withdraw the offer at any time prior to seller's lender's approval".

I presented this offer to my seller. We both knew $175,000 was nowhere in range of market value. Additionally, 45 days for lender approval is not realistic, with Short Sale approvals sometimes running 120 days or more. Finally, the buyer having the right to withdraw the offer at any time, made it a non-offer. So we countered as follows:

-Purchase price: $210,000
-No right to withdraw at "any time"
-90 days for bank to approve, with additional 30 days if needed

The buyer's agent responded the next day: "My buyers have decided not to accept the counter offer conditions, they don't want to wait 90-120 days to find out whether or not their offer will be accepted. If they knew within a few weeks that the seller's lender would take their offer but it would take that long to close then they wouldn't mind waiting. It would tie them up too long and they want to find a place soon. I explained to them the timing of the short sales and they will try to find something that isn't one."

This agent should have found them a non-short sale in the first place, if that was the buyer's outlook, and the agent should have educated the buyer about the Buying Short Sales. Instead, the buyer was attempting to tie up the property, generate an avalanche of paperwork and phone calls, and then say "no" at any time. The practice of agents writing offers with the buyer's right to withdraw at any time has grown for two reasons. One, because many Short Sale listing agents send multiple, sometimes unsigned offers to the lender in a "bid" situation, and the other, by buyers simply frustrated with waiting. When more listing agents practice One Strong Contract principles, buyers will become confident that the their Short Sale contract will close. But before then, these types of offers will continue to run rampant in the marketplace.

It's Wendy!
Wendy Rulnick, Broker, CRP, CRS, GRI, ABR Rulnick Realty, Inc.

Search Destin Florida real estate and vicinity.
Short Sale Pre Foreclosure Help.
Read my Blog.

Specializing in real estate sales on Emerald Coast of Florida: Destin Florida real estate, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Dune Allen, Blue Mountain Beach, Freeport, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field. Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or local 850-650-7883 ext 204

Copyright © 2008 By Wendy Rulnick. All Rights Reserved. *How "Not" To Buy A Short Sale* Contact Wendy Rulnick regarding Destin Florida real estate and vicinity.

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