I have had several buyer's agents, who mostly represent investors, argue with me that our sellers should take the first offer even if it is a lowball offer because it will get the ball rolling at the lender and get a BPO ordered. I have always maintained that these are really bogus offers that tie up the seller and are essentially dishonest.
I get so many of these agents calling on any one of my many listings and it's really ticking me off. What are your thoughts?
Deb Orth
Keller Williams Realty
Richmond, VA
Keller Williams Realty
Richmond, VA
**********************************
like buttons
Replies
Now if a BPO for a conventional loan came in on a property at $120,000, I don't think it's unreasonable for an investor to offer $88,000 on the property and get it for that price. If they resell it for the $120,000 or within that range, I'd say that offer was excellent because it got the property sold and NO it wasn't a lowball offer, but if they put in an offer of $60,000 knowing they would go up to $88,000 on a counter, I don't see a problem either. Is the $60,000 lowball? Maybe, but I guess it's your perception or opinion.
I have worked with two investors and have seen it work multiple time, so realistically here I think everyone needs to define what they consider lowball. On the above scenario, if anyone came to me with a $25,000 offer I'd laugh and YES, I would consider it lowball.
I have not seen the investors I've worked with tie up a property, but again, I know I'm working with good ones. They are very calculated with their offers. I think every agent should have a discussion with an investor before they say no or consider saying no and ask them what their strategey is for getting the home sold without a deficiency. If they are a decent investor, they should be able to lay out their plan for you so it's black and white.
I know I'm in the minority on this and that's ok, but I think it's important to understand what the buyer's agent is doing, what the buyer is doing and how they do it before the door is shut in their face without a conversation.
As an investor, I'd recommend that you "interview" investors and find one you find reputable and honest that you can work with. Not all investors are bad. From my experience working with realtors - and I'm not stating a global generality here - is that working with too many interests from different people messes up short sales.
Most lenders have acceptable ranges of net to lender that they will work within. Lowball offers are intended to get the process started, but can stall the short sale process. The biggest advantages of working with an investor is that they can do the negotiating for you, often bring cash to the buying table (read: won't be denied lending and retract their offer so you have to start again) and usually are in for the long haul to get the short sale done. My negotiator ensures his short sale acceptances are satisfaction of the loan - no deficiency and promissary notes to the seller. He also ensures my realtors are doing the work they do best - selling homes - instead of wasting time on hold with lenders trying to figure out the negotiation process.
Go to your local REIA meetings and get to know some of the local investors, find the reputable ones and create a working relationship with a few that can get the job done and have a good running history of ethical work. Yes, their intent is to buy low and hold, or sell for profit. But they can be a valuable asset to your team, but you have to ensure you create a good working relationship with someone you can trust.
Best of luck!
Wendy Rulnick said:
I'm definitely in the minority here, but I have two investors that I work with all the time. I usually am the sellers agent or I can dual agent in my state. If I'm strickly seller's agent, I don't rep them.
The biggest thing I will say is know who the other agent is and know who you are working with. I have a great relationship with both investors and built in buyers for about 65% of my listings.
I've seen horrible things said about investors and I'm so shocked sometimes. I guess people have had bad experiences but that certainly isn't representative of all short sale investors.
One investor I use does a rehab flip and yes both investors always are trying to get the best price, but they are both very calculated in their offer prices. They typically have done comps, after rehab values, in both best and worst case scenarios. They usually are within 10% of the BPO price in what they determine the BPO price to be and then work backwards from there. They know to offer between 90-80% of that price.
They can get most short sales closed in 4-6 months although one right now is going on 10 months and it's because the second lender can't seem to get on the ball. It's really the second that's holding it up.
I've done 12 short sales with them and 10 got no deficiency. One got a deficiency that was bank of america and the investor had their lawyer try to send the contract back to BOA demanding they remove the language, but they just couldn't get it approved without removing the deficiency. It was all on his dime.
I guess what I'm saying is it's totally workable if you build a relationship with someone good. I don't wait around for buyers. They both take title to the property. One rehabs and one does a straight flip.
I would just open a dialogue with the next agent that calls you and get as much info as possible. Check your attorney general and make sure there isn't a compaint, check the corporation list and make sure they are actually registered, try to get referrals if they can provide them from other agents AND homeowners, and make sure your comfortable with all their disclosures....OH YA that's the biggest thing. Make sure they have disclosures to the lender and homeowner.
Good luck