How To Make A Buyer Walk - Destin, FL Short Sales
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Short Sales are very complex transactions but they can reap incredible rewards. I specialize in short sale properties and work primarily with short sale buyers. I do like to carry a few short sale listings but I often find myself on the buyer's side of the transaction.
Characteristics of a Good Short Sale Agent
1. A good short sale agent will give realistic expectations. I tell my buyers to expect to wait 90 days to 6 months for the transaction to close. In some cases they close sooner, but in most cases they take 90 days to 6 months. If they close sooner, we can celebrate.
2. A good short sale listing agent will gather information from the seller up front and forward all documentation to the short sale lender within a few days of the offer being accepted. Sometimes short sales are slow because the seller or seller's agent waits weeks or months to submit the paperwork.
2. A good short sale listing agent will follow up with all parties regularly to update everyone on the progress. As a Destin Short Sale Buyer's Agent, I like to know when all paperwork has been submitted; I like to know when the BPO has been ordered; I like to know if the servicer has countered the offer or terms; I like to know if the file has been submitted to the investor; I like to know if the negotiator is not returning calls; and I like to know when we can expect an approval letter. I also appreciate a follow up stating that we are at the same stage we were at last week. I really just appreciate the communication, it makes me feel good about the deal.
3. A good short sale agent will submit a contract that the lender will accept. Short Sale Lenders do have requirements. Most lenders will not pay buyer's side closing costs. Most lenders will require that the property close within 45 days of lender acceptance or less. I write up all offers with the seller/lender paying title insurance and doc stamps. This will normally work. You will run into a problem if you require the lender to pay buyer's mortgage related expenses. If your buyer is using an FHA loan, you may be able to have the short sale lender pay buyer's closing costs but this is the only situation where I have seen this happen and of course it depends on the lender. Do your research. www.shortsalesuperstars.com is a great resource.
How To Make a Buyer Walk.
1. Setting unrealistic expectations. You always see language "Buyer Walked, Can Be Closed Quickly". I have had a couple of situations like this where the buyer was given unrealistic expectations and when the 45 days was up, they walked. There is such a thing as a Pre-Approved short sale but there are also many false imitations.
2. Failure to return phone calls and emails. This one drives me crazy. My buyer client wants an update and I call the listing agent. The listing agent will not return my call. When the buyer finds out that I cannot get a call back, we start to discuss other options. In my opinion if the L.A. cannot return a simple call or email, there is no way he can perform the follow up that is necessary to see a short sale transaction to the finish line. This is a Big RED FLAG!
3. Way under priced! Short Sale Sellers and Listing Agents set the list price, not the bank (in most cases). Unless you are dealing with a FHA or HAFA pre-approved short sale. When the short sale lender receives an offer, they order an appraisal or BPO. You may be able to get the property at 5% or 10% less than appraisal but in most cases they want appraised value. If the property is ridiculously under priced, the bank will counter and in many cases the buyer will walk!
Short Sales are like anything, If you have experience and education, you will be successful. If you are trying to wing it, you will most likely fail. Hire an experienced short sale agent and you will have a strong chance of success.
Clayton Bonjean, Broker - President, MBA, CDPE
850-585-1284
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Comments
J. Law - The best advice i can give you is that patience does pay off in a short sale. Eventually, you will probably get an approval letter or a counter offer, but sometimes they do go south (just like any real estate transaction can). Good luck and hang in there, be sure to keep your eyes open for other opportunities, just in case. Requesting an update every week or two is common courtesy, especially after you have been waiting over 45 days.
I couldn't have put it better myself! We are trying to purchase a short sale and I am ready to ring the LA's neck! And our agents (we love them) haven't had good experiences with SS's so they feel it is "normal" to not hear anything because they think the LA hasn't heard anything. How flipping hard is it to return a call....it is unbelievably frustrating and we want to tell him to take a hike...but we LOVE the house....ughhhh
Jim, that is great advice.
Thanks!
Clayton
Absolutely True! Don't forget to check out the listing agent's history of closed short sales, it may save you a lot of headaches later.