The higher offer. Short sale lenders look at the bottom line, not type of financing. Other terms in the contract are important, too. Time for short sale approval, EMD, closing costs, etc. The terms must be reasonable and approvable.
lower offer, with the buyer agreeing to extra cash to Greentree to buy out deficiency.
I would submit the cash offer but let the buyer know that the lender may come back with a "Highest and Best" or a specific dollar amount counter offer. Find out your buyer's Highest and best so you know how much wiggle room you have. Take the financed as a back-up if possible. The real question here is value. Prepare the cash buyer for a counter - at, near or above the listing price. Also, 14 says is not going to happen with Nationstar and Greentree. Let the Buyer know this will take 45-60 days That's just what I would do.
Best of Luck to you!
Carmine R Biello Jr.
Cash offer accepting financed offer as backup. I've had more buyers get declined at the last minute in the last six months than in the last six years combined. Short sales are too hard to get done (especially with multiple liens) to have them die because a borrower got declined for financing at the last minute. Prequal letters aren't worth the paper they're written on.
I think I would look at the amount of the defiency and find out what numbers will work for bank 1. Cash is extremely helpful in a short sale because they can close quickly. What type of approval does the financed offer have? And when in doubt, present both offers to the bank. Let them decide. Why face a possible problem from the primary lender if they find out they could have gotten more money.
The higher price offer because Cash Buyers will not wait for the time it takes to get an approval. It's ovious by their offer they do not realize it will take a lot longer than 2 weeks to get the approval. They have $500K in cash, so therefore they can buy anything they want at anytime. They do not need to wait for this property. It is unlikely they are buying the property to live in so this is not an emotional buy for them.
The conventional / higher priced offer is likely someone who wants THIS house - and they will wait for the approval. Plus, it's more money for the bank.
It's great that you have 2 offers. I don't think there's enough information here to select which would be the highest and best. Simply being the "highest" does not necessarily make it the best. Maybe they are also asking for a sellers assist to better qualify for the dream mortgage they want with 1.95% interest? Or asking the lender to cover the buyers transfer taxes? All of which bring the "net to lender" down. or they want the stainless appliances and washer/dryer the seller is NOT including, which will save them thousands when it's time for them to leave their home.
Are they really per-qualified with a legitimate lender who comes through? Or is the pre Q not worth the paper it's printed on? @Jim Stewart is spot on, the issues we've seen lately are with buyers financing. One of the agents I work with has had 5 fall apart at the 11th hour in the past month.
Value of course is an important thing to consider from every side. At 515k list price, either offer should work rather easily...if it's priced right to current market value. 499k is a 97% offer and very workable. That is if you have done your homework, if the property is listed right, and you can justify it for the BPO/lender valuation.
Cash buyers are the easiest to work with for many reasons. Keep in mind, while having the "ability" to close in 14 days, that doesn't mean they always end up closing that quickly. But the CAN if necessary. We all know there's nothing short about a short sale timeline.
To make a long story short Wendy, there's not enough info here to say which I would recommend to a seller. Hopefully I gave a couple things to think about though. Thanks for reading.
Joe Pringle Sr
Not enough information to call. all terms and conditons need to be known. Cash buyer have been know to walk also. Plus some cash buyers have converted to financed loan after 30 or so days into acceptance. So unless you know the buyers' character that well, You would need to look at both offeres in the same way as true buyers and honest in thier intent of buying. We as Realtors need to point out the differance between the two offers and let the seller decide, It is not our position to decide for them. (We do not choose unless we are prepare to see the inside of a court room)
Joe mentions something very important to consider. The ability, willingness, and wiggle room for the cash buyer to contribute to Green Tree should they require a cash contribution from the "Seller". (because at the end of the day, cash at closing is cash at closing) It is however also important to make sure that both buyers are serious about the transaction.
Cash buyer's often beleive they can offer less because cash is a sure thing.... (no concerns over lender issues and the capability of a fast close) but Wendy is absolutely correct in stating that the lender does not care about the type of financing. Cash over Conventional financing, if there wasn't a 2nd mortgage - I'd take the Higher Offer all day long.
Maybe you already have some insight into the position Green Tree has taken on this sale... if not, find out how serious and how flexible the cash buyer is just as Joe suggested. Good luck!
Thanks Brian...you definitely have to spend some time educating the buyer and sometimes their agents. Part of that is educating them on a fair price and making sure they are in, then we'll fight for that offer. And the flexibility of a cash transaction makes life easier in many ways.
What's the estimated market value of the property? If the cash offer is not within market value range it's not worth your time accepting it, unless the buyer has been educated and is willing to increase that offer if the mortgage company counters.
I would go with the 525k and here is why:
Less deficiency balance- every penny counts
2nd lien Green tree is a nightmare to work with and they won't accept anything less than 20% + of what they
are owed. Good luck getting a full satisfaction of debt release with them.! They have attorney's in their office that
are negotiating the payoffs/liens.
Nationstar BPO values have always been way off from the sales price when we had deals with them. They are not as bad to work with. Key importance is that the seller accepts an offer that is the best and highest close to the FMV in the area.
Good Luck! ;)