02 Nov Short Sales in Southwest Florida – The Latest News Part II
Our second key player in the short sale process is the homeowner. Obviously, the homeowner is the one player with the most at risk. By the time they are entering the short sale process, not only are they significantly underwater on their homes, now they are also at least three months behind on their mortgage payments. Therefore, they want to get the highest sale price as they can to avoid a potential deficiency claim later. So, the homeowner is definitely in favor of a bidding war on their homes and would welcome multiple offers, despite the amount of work it would create for a seller’s agent, buyer’s agent or the mortgage company.
Unfortunately, I’ve seen a case where the bank accepted a short sale and wouldn’t take other offers. The seller brought a cash offer of $25,000.00 more to the bank and was turned down. Accordingly, by limiting the offer process to only one offer at a time, this places the seller in a very difficult spot because the seller never knows if there is someone else out there who is willing to offer more.
The Real Estate Agent’s job is much easier when the bank is willing to accept only one offer. Then they list the property at the price the bank is willing to accept, and they wait. If there are multiple offers being accepted, then the Real Estate Agent’s phone may be doing quite a bit of ringing. Obviously, their commission is determined by the selling price unless they have entered into some other contractual provisions. However, either way, they have a vested interest in moving the property as well.
The Buyer’s angle is totally different. The Buyer wants to submit as many offers as they can with the hopes of snagging the best deal possible and walking away from the bad deals. In this market, a buyer needs to do his or her research before making the final deal and saying “I Do”. Most buyers are submitting offers that they can walk away from for various reasons. So, if you really want the property, you are willing to go into it for the long haul. However, if you do not want the property, you can decide to walk away and there is “No Harm, No Foul”, despite the fact that you may have caused the homeowner undue stress.
This short sale game is won only by the buyers, who may or may not be getting a good deal on a house. Their hope is that if they put enough irons in the fire, they will get a hot one.
This post submitted by Carmen Dellutri, Esq.
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