Just submit any offer or wait for the RIGHT offer?

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?

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).

Replies

Terry McCarley August 25, 2013 at 4:22am

I think you should always submit a realistic offer you truly believe the lender will approve. Anything else is a waste of time and not in the sellers best interest!
Cindy Billman, CDPE, SFR August 25, 2013 at 3:01am

Drew - keep doing it your way as it is the right way - I have always listed any short sale at FMV and negotiate to the highest amount I can get for the seller, besides, the lienholder is going to order an appraisal so why waste anyone's time with a lowball offer? Most banks are looking to net 90% of their appraised value.
Tara Samney August 22, 2013 at 4:34pm

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).
Jonathan Katz August 21, 2013 at 10:22am

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

Brett@ishortsalenow.com

310-564-6389

www.ishortsalenow.com
Bryant Tutas August 21, 2013 at 7:28am

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.
- Tara Samney > Bryant Tutas August 22, 2013 at 4:52pm
  
  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.
- Drew Ludlow > Bryant Tutas August 21, 2013 at 1:47pm
  
  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.
  - Tara Samney > Drew Ludlow August 22, 2013 at 4:37pm
    
    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.
Minna Reid August 21, 2013 at 7:23am

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.
- Tara Samney > Minna Reid August 22, 2013 at 4:51pm
  
  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.

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