I've had MY way of doing short sales for the past 7 years.  I think my way works, but I am always open to new ways of doing things, and new opinions.

Recently, I've had a couple agents (and an attorney) suggest a 'way' that I feel is not in the Seller's best interest.

I have almost always felt that the Seller should negotiate the best possible deal on a short sale offer before submitting it to the bank. Get that price as high as possible and even reject offers that we think have no basis in reality or no chance of bank acceptance.

However, it appears that other agents feel the Seller should submit any offer because it is the bank that really decides what price to accept.  "Just go ahead and submit the offer.  Let the bank decide what they want to do".  I've had agents tell me that I am not acting in good faith by negotiating the offers upfront.  "It would show the bank that you are trying harder if you just submit all offers 'as-is' and they will be more likely to work with you", they tell me.

I have a big problem with that on many levels.  What do you think?

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I totally agree with you. Why submit a low ball offer, and tie your seller up for 60-90 days on something that won't close? That is Not in the seller's best interest. You, like me, get told this submit any contract crap, from buyer agents whose buyers are probably putting in 10 other low ball offers, and have nothing to lose by tying up your seller. Tell these agents/buyers to go waste someone else's time.

Wayne... yes, sometimes it is from investors putting in 10 other lowball offers.  But moreso, I am seeing this from Buyers who are ill-advised by their agents.  This agent truly believes this is how the industry works.  And worse, she has the experience of working 3 short sales this year to prove it! :-)

I was told today that I was the FIRST agent who ever rejected any short sale offer from this particular agent.

My point is that many agents truly do not understand short sales and how they actually work.

Thanks for your input.

I'm seeing it a lot with buyer's agents. I've gotten to be very clear in the MLS explaining to them to wait min 45-60 days, sign a short sale addendum, who the investor is, give them weekly updates and come week 2-3 they are calling/emailing me every other day wondering why we don't have a response yet.  It is frustrating to me and offensive when they think b/c they sold just a few short sales they are experts and want to advise me on how to hurry it up (especially with a different servicer/investor). I think they are so desperate to get their buyer in a house they must make promises which are unrealistic as to timeframe.

Worse is becoming the lenders who think the short sale closing deadlines are just flexible (when there has been 30 days to close), and I'll just go get an extension. I've always managed it, but it is undue stress and one time I won't be so lucky

 

I think they have also been looking forever with their client and instead of a reality check on what is available- they go for the short sales b/c they think they are going to get a great deal and just want to see how low bank will take.  I don't know who is telling them that...unless it is their agent.

The lender is not a principal in short sale and has no responsibility to the sellers best interest. You represent your sellers best interest which is not sending every lowball offer to the lender to see if the buyer can get a great deal while you waste 3 months in the process. Come on now. Just keep doing exactly what you've been doing. I've also had these idiot requests from buyers agents that don't have a clue....just ignore them.

Well said. I get buyer's agents asking for the bank to make repairs after the inspection on an as-is contract.  The bank is not on the contract as the seller.

ALWAYS submit an offer that will be accepted. Low offers or letting the bank decide is just flat out lazy and places the seller 90-120 days closer to foreclosure. I thought this train of thought vanished several years ago. I guess not.

You are right on that.  I too thought that behaviour had vanished.  But now, there is an influx of agents who have one or three SSs under their belts and really have not run the gamut of how things actually work.  So, they base their decisions and actions on maybe one deal that worked out that way in the past.

I've been encountering that lately. Worse is when they don't understand the investor and did a short sale a year or 2 ago. The short sale class that is taught by the local Realtor's assoc grossly generalizes how it really works, and every deal is very different.

Bryant, I owe you for righting my wrongs on that. When I started my broker at the time advised me to do it the wrong way. It was painful, and a waste of time.

Submitting offers that are too low is a waste of time, it needs to be somewhere in the ballpark of FMV.

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Your way is correct.  I started with the other way b/c of bad advice. It just wastes time, and you will usually lose the buyer. Worse, the home is taken off the market as it is pended (or at least in my area it is required).

The problem is while the investor may have a price they will accept- you lose the ability to get a higher offer that is closer to appraised AND in most cases the default/foreclosure track doesn't stop. There is absolutely no point for the seller to go under contract on a lowball offer. I've had agents say oh the buyer just wants to see if the bank will take it, but they can come up.  No, they don't.

Stick with what you have been doing. It comes down to math on the stength of the offer against the BPO/appraisal and matching investor guidelines for them not how hard they think you are trying. I don't believe that for a second. It comes down to what the seller wants to accept, but I would never advise to accept an offer with comps in hand and know the bank won't approve it (simple math). 

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