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Offer too high

Posted by Laura Hunter on August 25, 2011 at 3:34pm in Short Sale Discussions

Anyone have a seller "hold on to your offer because they think it's too high to get a loan"?  They won't accept or decline.

 

If you think you are getting the run around with an offer, is there any recourse for a house listed as a short sale in lieu of foreclosure?  We love the place and would love to advocate for ourselves if we knew what path to follow.

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Replies

  • Laura Hunter August 29, 2011 at 12:36pm
    I did.  My understanding is that, while it is considerably lower, it is cash.
  • Jeff Payne August 29, 2011 at 12:31pm

    So did you find out if the seller has already accepted another offer?

     

  • Laura Hunter August 29, 2011 at 12:21pm
    Weird, Richard - I learned the seller is an appraiser (and used car salesman).  He has a realtor, but she is just communicating for him.  I get the impression she is creating distance on this one.

    Richard said:

    Hi Sam,

     

    Thanks for chiming in.  I could be way off base here.  I'm not making an argument that the buyer shouldn't try and get an agreement on a lower price offer.  That would be the first thing I'd try, however if they (the seller) continued to waver back and forth, I'd be suspious.

     

    Also, as in your case I could agree that anything is possible but, is it realistic?  I'm just guessing but I'd say that maybe 1 in a 1000 homeowners would turn away a higher offer, especially knowing they'll have to get their short sale approve by a lender that's already p!ssed off.  Could it be that the short sale was already bank approved at a previous price and the prior buyer walked?  Could it be the seller's trying to sale to a relative or friend.  Why would the seller want to take on more debt?  I don't know.  But, why not give the buyer and their agent a chance to negotiate the price with their own agent?

     

    Let's use your case........how many sellers are actually the negotiator themselves?  How many sellers really know the difficulty their short sale agents will have to go through to get their sale approved.  Additionally, on a similar note only a few years ago, there were bidding wars that got the sale prices of homes well above what they were worth.  Sellers and their mortgage companies weren't turning away the money then. That's partially what got us into a mess.  So what's changed?

     

    What are the chances the seller is an appraiser?  All I was saying is something seems suspicious.  As a potential buyer, short sales have no guarantee or warranties, so why would I want to tie my money up in an even more suspicious character?  Please correct me if I'm off base.

  • Laura Hunter August 29, 2011 at 12:18pm
    Paul - thanks so much for the suggestion.  I think it is totally worth what we've offered and the waiver of the appraisal contingency is a terrific idea!
  • Paul Francis - Vegas Short Sales August 29, 2011 at 3:48am

    Hmm.... well I don't see it mentioned but we had problems at one point with Buyers and their agents playing the "appraisal" game.

     

    AKA... put in the highest and best offer beyond what anybody else would consider offering in order to have the offer accepted. When it came time for the buyers lender to do their appraisal... it obviously would not appraise and a price reduction would have to be requested.

     

    When the $8,000 tax credit was in play for buyers I saw it all the time when we had so many multiple offer situations. Some of the offers I saw during this time frame would come in WELL above market value just to have their offer accepted  and we knew the property would not appraise and the buyers would not get a loan for the amount they needed.....(it was so obvious what they were doing)..  possibly wasting everybody's time especially if the sellers lender would not lower their approved minimum net proceeds.

     

    Why don't you modify the offer to what the sellers (and their agent) think will work?

     

    Or... you can write up an addendum to the purchase agreement stating that you will make up the difference in cash if the appraisal comes in lower then your offer. AKA... waiving the Appraisal Contingency.

     

    Ironically... I'm closing on one of my short sales today where the buyer came in high and waived the appraisal contingency on their offer. They really wanted the property... It was pretty easy to get that one approved with the future deficiency judgment rights released...

     

     

     

     

  • Richard August 26, 2011 at 9:22am

    Hi Sam,

     

    Thanks for chiming in.  I could be way off base here.  I'm not making an argument that the buyer shouldn't try and get an agreement on a lower price offer.  That would be the first thing I'd try, however if they (the seller) continued to waver back and forth, I'd be suspious.

     

    Also, as in your case I could agree that anything is possible but, is it realistic?  I'm just guessing but I'd say that maybe 1 in a 1000 homeowners would turn away a higher offer, especially knowing they'll have to get their short sale approve by a lender that's already p!ssed off.  Could it be that the short sale was already bank approved at a previous price and the prior buyer walked?  Could it be the seller's trying to sale to a relative or friend.  Why would the seller want to take on more debt?  I don't know.  But, why not give the buyer and their agent a chance to negotiate the price with their own agent?

     

    Let's use your case........how many sellers are actually the negotiator themselves?  How many sellers really know the difficulty their short sale agents will have to go through to get their sale approved.  Additionally, on a similar note only a few years ago, there were bidding wars that got the sale prices of homes well above what they were worth.  Sellers and their mortgage companies weren't turning away the money then. That's partially what got us into a mess.  So what's changed?

     

    What are the chances the seller is an appraiser?  All I was saying is something seems suspicious.  As a potential buyer, short sales have no guarantee or warranties, so why would I want to tie my money up in an even more suspicious character?  Please correct me if I'm off base.

  • Jeff Payne August 26, 2011 at 6:26am

    Got it, just keep in mind that number has NOTHING to do with the short sale, nothing to do with you.  It is simply an amount that either the bank is seeking or they have been awarded in a judgement.

    It is alarming to me that your agent or the listing agent did not know that.
    With that being said, with the experience of the agents, the fact that there are 2 mortgages and the fact that you have nothing in writing, you really should think about moving on to another house, one that has an experienced short sale agent or one that is not a short sale.  

  • Laura Hunter August 26, 2011 at 5:45am

    It is not the appraisal itself.  It just notes that it was completed and the amount it appraised for as an update in the foreclosure proceedings.  There was also a sheriff's sale scheduled and cancelled with an offer noted on the record.

  • Jeff Payne August 26, 2011 at 5:28am

    Laura, I am very interested to see this appraisal that was recorded with the County, is your county online? Can you pull it up and send it to me?

     

  • Laura Hunter August 26, 2011 at 5:00am
    Primary just transferred from BofA to GT and in total there are 2 mortgages (the other is with Citi (Vericrest)), but more interested parties (MI, etc.).  I am in OK.  My realtor and the seller's realtors admittedly are not an experts and confirmed that it is an appraisal that has been recorded with the county.  There are not that many short sales in this area.  
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