Short Sale Myths- Top 3 Short Short Sale Buying Myths- Low Ball Offers
There are a lot of myths about buying and selling short sales. Last week we focused on the myth of the earnest money deposits accompanying short sale offers. ( link to article)
The second myth is the low ball offer.
Whether you are watching late night TV informercials where the guy is selling you his program on how to buy real estate for fifty cents on the dollar or you are listening to your uncle who claims he just bought a short sale dirt cheep- take it all with a grain of salt. Listen to your experienced real estate agent who is short sale specialist.
When you are in the market to buy short sales choose your real estate agent wisely. Make sure that your agent has a proven track record of successfully closing short sale transactions. Your agent should not be an order taker but rather an expert on your local market conditions and values.
Insisting on making low ball offers on short sales is most often wasting your time. In most areas of the country the market is contracting. We get multiple offers on our short sale listings. The most recent short sale listing we put on the market had mulitple offers on it within 7 hours. This is not an anomoly. It is most common place.
Are you making offers just for the sake of making offers or do you want to make an offer that is going to get you the property? That is the big question. Why are you making offers on short sales?
The strategy of offering a low ball price for the home of your dreams is the fastest way to kill your dream.
When we get multiple offers on our short sale listings the sellers are looking at what is the highest and best offer first, then they look at which offer is most likely going to be able to close. There are many factors to look at. But for now, we will look at price. The seller is most often going to take the highest priced offer.
Many people are under the erroneous assumption that the seller does not care about the offer because he or she is doing a short sale. The reality is that sellers are going to be affected by the price.
The seller’s lender is going to get a BPO ( brokers price opinion) or appraisal on the property before they approve a short sale. They will base the value of the property on that BPO or appraisal. The counter offer will be a fair market value. In the case of Fannie Mae being the investor on the note you may even see a higher than market value counter offer coming back to you.
If the seller is in the foreclosure process time is of the essence. They are playing a game or racing the court house clock and hoping to close on their short sale before the date of the final judgment. It would not be wise for the seller to accept an offer that is not going to end up in a closing before he or she loses the house. The foreclosure process does not stop just because there is an offer on the table.
The best strategy for getting a short sale property is to make a fair market value offer.