Home inspection contingencies etc...
I am pretty sure I already know the proper way to handle this but just curious as to how some of you other agents handle contingencies when dealing with a short sale.
I just had a 40 minute phone conversation with a buyers agent who has never been involved in a short sale transaction. Long story short he wants to do home inspection after we receive short sale approval which I told him is not the proper way to do things and that we should stick within the timelines of the contract for any and all contigencies and mistakingly tried to explain the dynamics of how a short sale works and that there are other factors(in this case a Federal Tax lien) that may play into the timeframe and just want to make sure that his and his buyers(son in law and daughter)expectations were realistic. This was border line an argument as he began asking me questions if I was aware of the "federally mandated" 30 day response time from the big lenders and all of the agents in his office have an attorney negotiate their short sales and that no agent in his office ever does any type of home inspection, appraissal etc until they receive final bank approval which as far as know is not the proper way to do things and at that point we were butting heads as to what is the right and wrong way of handling things.
Im beginning to think that maybe I went into too much detail but I just try to make sure buyers and buyers agents know what to expect and just curious as to how some of you handle buyers agents that really do not understand and some advice as to how to handle them because I obviously want to help my seller avoid foreclosure and get the deal to the table. The kicker is he has not even sent over an offer nor agreed on price!
Replies to This Discussion
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Permalink Reply by Denise Hippert on
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Completely agree Smitty. I too have had inexperienced SS buyers agents insist the buyer should wait until after lien holders approval for inspections and I have learned to keep my explanation simple: My seller is not willing to take the risk of delaying the home inspection and will not accept the offer unless the inspection is done within 10 days of the seller's acceptance of the offer.
If the buyer's agent doesn't "get it" they're not going to do a good job of explaining it to their buyer.
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Permalink Reply by James Miner on
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Not knowing what state you are in, absolutely would not do the home inspection until the Approval Letter has been issued, the buyer or seller may not be able to comply with the terms of the Approval Letter so why waste someone's money?
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Permalink Reply by Pat Chadwell on
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As you can see there are many varied answers. In California as stated in an earlier response the short sale addendum offers a choice as to when the timeline starts. Generally it is after the seller's lenders have given their approval letter.
Although it is a risk for the seller, I do not find buyers in our area would ever pay for inspections prior to the lender approval. Where we are there is not 100% lender approvals being given so the buyer would be out their inspection money.
I am now collecting a 1% fee upon signing of the contract. I work to ensure the buyer has knowledge about short sales, the fact that it is an as-is sale and no repairs will be done, and that they can secure the loan.
Good luck. I love to see all the responses!
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Permalink Reply by Richard Oreck on
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"In California as stated in an earlier response the short sale addendum offers a choice as to when the timeline starts."
Actually Pat, that is not what I said. The California Assoc. of Realtors Short Sale Addendum does not offer a choice of when the timelines start. It clearly states that they start once the buyer is given notice of the Short Sale Lender's consent. The deposit does not even go into escrow until that point.
Smitty, aside from how it is commonly done in various areas it also depends on who you are representing. If we write an offer for the buyer our fiduciary duty is to them at that time and we are serving their needs. If it is a dual agency when we present it to the seller our fiduciary duty is to them in going over it. Perhaps you only represent sellers.
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Richard -
I think you need to reread your California Assoc of Realtor - Short Sale addendum - under page 1, para. 2. Time Periods - (ii) (if checked) shall begin as specified in agreement. There is a choice.
It is important we know what the contract states so refreshers on that document might be in order from time to time.
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Pat, you are correct. There is that option.
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