How to Write A Short Sale Offer In A Competitive Market
The local real estate market in Santa Maria and Orcutt California is currently dominated by bidding wars and multiple offer situations. So, no matter what type of listing it is (REO, short sale or traditional), the one certainty is competition. As a local short sale agent, I am amazed at the offers I see that just will not fly in this environment. Although short sale sellers generally do not receive proceeds from the sale (unless they are lender approved incentive payments), their needs and desires should be considered when writing a short sale offer, especially if you want to gain their acceptance of your offer in a low inventory market.
Here are a few tips:
● Don’t ask for the seller’s personal belongings. I’ve seen this time and time again. Hands off the seller’s personal belongings! Unless it is offered in the listing sheet (and maybe not even then), do not ask for a short sale seller’s refrigerator, washer, dryer, or couch. Short sale sellers are usually in financial distress, most don’t welcome also having to replace appliances and furniture when they move.
● Offer to put your initial deposit in escrow. This shows commitment to the deal, and that you are probably not one of those buyers who is constantly shopping around while the seller is applying for short sale approval. Losing a buyer is one of the typical reasons why short sales drag on and on and if the foreclosure time clock has begun it can also cause the seller to lose the property through foreclosure. Assure the seller that you are committed to the deal by showing them the money.
● Do your home inspection up front. Most short sale sellers are looking to sell their home “as is” because they do not have the funds to make repairs. Of course, buyers are encouraged to carefully review disclosures and perform a home inspection so they can determine what “as is” is. By offering to do your home inspection up front, the seller is assured that you are committed to the deal and that they are not going to be hit with last minute repair requests after the short sale approval has been issued.
● Write a clean offer. Clean offers are easier to get approved by the short sale lender. Offers that do not ask the seller to pay closing costs, termite repairs, or purchase home warranty policies are generally considered “cleaner” than offers that request those concessions. If the market is competitive, consider leaving out the extras that you would like to have but are not likely to get. Don’t assume that you will receive a counter offer in a competitive market.
● Offer a timeline that works for the seller. If the home is still occupied by the seller, have your real estate agent ask the listing agent about the seller’s plans. If they are still figuring it all out, they may want to wait for the regular contract period to begin. If they are mostly concerned about minimizing damage to their credit and an upcoming inability to pay, they may prefer that you begin the regular contract period now and be ready to close when the short sale approval(s) arrive. Find out what that particular short sale seller wants in terms of a timeline and offer it to them.
If you are interested in purchasing a short sale home in the competitive Santa Maria and Orcutt real estate market, it may help to work with an agent who has short sale experience. Understanding the short sale process and the dynamics at play for short sale sellers, can be essential when making short sale offers in this competitive market.
Those considering a short sale of their property should obtain legal and tax advice, and also consult with an experienced local short sale agent. If you are considering a short sale of your Santa Maria, Orcutt, or Nipomo home and would like a no cost short sale consultation, please call my office to schedule a meeting or a telephone consultation at (805) 938-9950.
TniLeBlanc is an independent Real Estate Broker, Attorney, and Short Sale Agent. She is a Certified Distressed Property Expert (CDPE), Short Sale and Foreclosure Resource(SFR), and Certified HAFA Specialist (CHS) serving the Santa Maria, Orcutt and Five Cities area of the Central Coast of California.
* Nothing in this article is intended to solicit listings currently under contract with another broker. This article offers no legal or tax advice. Those considering a short sale are advised to consult with their own attorney for legal advice, and their tax professional for tax advice prior to entering into a short sale listing agreement. Any and all program benefits described are subject to change.
Copyright© 2012 Tni LeBlanc *How to Write A Short Sale Offer In A Competitive Market*