Should You Make Offers On Short Sales That Are Listed?

Should You Make Offers On Short Sales That Are Listed?

Why make offers on listed short sales when WJL Financial can process them?

Should You Make Offers On Short Sales That Are Listed?

After the Real Estate Market collapsed, every other Realtor became a Short Sale “Specialist”! Even though most Realtors had never heard of a Short Sale! Although they never heard of a Short Sale, that didn’t stop them from marketing themselves as “Short Sale Specialists”.

The goal of a Realtor is to sell the property at the highest price possible when listing a property. As they say, once a Realtor always a Realtor! However, when dealing with a Short Sale this is not always the best goal, believe it or not. For the person selling the property, it doesn’t matter what the property finally sells for. The difference between what the homeowner owes on the property and what the property sells for is the deficiency.  And no matter what the margins are between what the property sells for and what is owed, we have seen 100% waiver of deficiencies on all our Short Sales. Also, the initial offer price is just that, an initial offer. It does not determine whether or not the Short Sale is approved. If the offer is too low, the lender will counter, but they almost never just reject the offer.

Let’s assume we are talking about an investor buying a short sale property. The purchase price means the most to the investor/buyer! The investor is the person who needs to make a profit from the property. Whether the investor is rehabbing the property and holding it to cash flow or markets it to retail buyers, the Short Sale approval price is important. If it is too high, then the investor can’t buy the property. If they don’t buy the property then the foreclosure process is not stopped and the Realtors representing both parties don’t make a commission. It’s a lose-lose for everyone! If Realtors list a property for too much, they are actually being counterproductive. When the lender sees the high listing price, they don’t want to accept offers lower than the high listing price. This results in an overpriced listing, no buyer, and a homeowner facing foreclosure. In today’s market, there are some investors overpaying for these properties. Most investors need to purchase a property at a target price to make a profit, if they don’t get that price they want will just walk away. Leaving the homeowner in foreclosure and a Realtor that has done a lot of work with no pay!

Realtors listing properties at a high price is not the only problem. A lot of Realtors don’t know the art of negotiating a Short Sale. So if one of these Realtors is in charge of the Short Sale from the start, more than likely the Short Sale will not be approved anytime soon or at a price that can produce a profit for the buyer/investor. A team of professionals is needed for a successful negotiation of a Short Sale. The Short Sale process is not just about making offers, the process has many steps and issues that may arise during the process. The realtor plays an integral part in the process, so it’s critical that they have experience and know what they are doing.

The answer to the question “Should You Make Offers On Short Sales That Are Listed?” in my opinion, is NO!!  Why make offers on listed Short Sales if you don’t know the Realtor or their experience level. It would be similar to hiring a “handyman” for plumbing work in your house. He may know about plumbing, but most likely he is not a “specialist”!

Ryan Kuhlman