I am constantly surprised at the number of agents who claim they know short sales but haven’t a clue.  Case in point is an agent I met with for lunch the other day.  He had a listing from a resident seller that he has listed as a short sale.  I had a client who is interested in the property so I asked “so is that price approved” to which he responded “of course not…it’s a short sale.”  I went on:

So have you had any offers?

Yeah, we’ve had a number of offers but they were too low.  I advised my seller to negotiate hard and he rejected the offers.

What do you mean?  Has the bank indicated that you need to get within a specific price?

You must not have listed a short sale before.  I don’t know the price the bank will take but no one should accept an offer that low.

By this time, my head was about to explode.  Thankfully, my phone rang and while the call was far from urgent, I made it sound like I needed to get back to the office or chaos would ensue.  I needed to get out from there and far away from that guy as possible. 

With a short sale, the listng agent usually only knows what the bank will take for the property or if the seller is even short sale worthy only after an offer is submitted.  Those of us who have done more than our fair share know about what the bank will take so we estimate based on the market and the balance owed on the property.  However, we don’t have hard figures until everything is sent in to the bank for review.  That’s why I love low offers. 

When an offer rolls across your desk that’s 30% of asking price, most often it takes all of ones courage and strength to keep from sliding it into the trash can.  With a short sale, a low offer is the listing agent’s best friend.  The agent can have the seller sign the offer, package it with the paperwork requested by the bank, and send it in for review.  The bank will reject or counter the offer and may reveal other red flags that the seller that could delay closing on a legitimate offer later on. 

With the bank’s counter-offer in hand, you will have an approved price that you can sell and the ability to turn the file around much more quickly should the buyer reject the counter  In the case with my agent friend, he could now market the house with his approved price, potentially a shorter closing, and, most importantly, prevent the foreclosure of his client. 

Charlotte Real Estate