Tuesday, September 21, 2010

More Short Sale Myths


It is scary how much misinformation there is about Short Sales. I am in the midst of negotiating an offer on one of my Destin Florida short sales. I told the buyer’s agent the seller will be counter offering.
1. The buyer’s agent was shocked, “Counter Offer!? The seller cannot counter offer. That is up to the bank!”.
Wrong. A seller still owns the property until the title transfers. A seller has the right to counter offer, accept or reject any offer. The approval of the seller's lienholder is a contingency of the contract. (The August 2010 issue of the Florida Realtor Magazine states that “The approval of the seller’s lender is a contingency much like a contingency for the buyer’s obtaining financing.” ) I explained that the seller did not want to send in the “low short sale offer and waste time”.
2. The buyer’s agent then asked me, “Does the seller’s lender know that the home is on the market as a short sale and did they pre-approve it?”
Again, “no” and “no”. These are common questions from buyer’s agents. I answered that I didn’t know if the seller told Bank of America his home was on the market. And it was not pre-approved. Sure, there are some HAFA or HUD Pre-Foreclosure sales where the sellers and price are approved in advance, but that does mean the contract terms offered would be approved in those cases, anyway. The buyer’s agent then said I could not market the home as a short sale if the lender did not know about it.
Wrong again! A home is listed as a short sale when the list price is not sufficient to pay off the liens in full at closing. (Of course, if it is a small lender, find out if their policies allow short sales before proceeding.)
3. Finally, to justify the low offer, the agent said, “Lenders accept 80% of value as a short sale”. BUZZZZZZZZ. Nope. There is not set percentage of value that each lender or servicer will accept for a short sale. It depends on the investor for each loan. Any percentage is based on the net to the lender anyway, not the contract price.

If you are new to short sales, study up. Join http://www.shortsalesuperstars.com/, a plethora of short sale knowledge. Learn, know and grow!
It's Wendy!
Wendy Rulnick, Broker, Rulnick Realty, Inc.
Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or local 850-650-7883 ext 204
Email Wendy: itswendy@rulnickrealty.com

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