Short Sales are NOT Bank Owned Properties

I can not believe we are even having to think about writing a post in today's market for Virginia agents and the Central Virginia real estate agents to explain that a short sale is NOT a bank owned property!! But we are!

I was asked to write this because this really just happened and we hope to educate agents as to what happens when you make an offer on one of our short sale listings.

After we receive your buyers' offer we contact our seller who is the homeowner of the property and present the offer to him/her/them.

It is then up to the seller what he wants to do with the offer. He can reject the offer, he can accept the offer, he can counter the offer or he can choose to do nothing with the offer. Your offer expires if he does not sign the offer before the time for acceptance lapses.

On one of our listings we received 3 offers in one day. Most all of our short sale listings get multiple offers. When this happens; our sellers choose one offer that they feel is the best and often ask for our input based on our experience. Then the seller will choose a back up offer also.

If none of the offers meet with the sellers' approval and with our experience of what a short sale lender is going to approve then the seller may send back to the buyers a counter offer. He may choose just one offer to counter or all.

So there is one agent who had sent in one of the offers for her buyers. The offer was $20,000 below asking price, the financing clause stated that the buyer was approved for his loan, yet there was NO approval letter. There was a pre approval letter that said his financials, income, etc were NOT reviewed. All they did was pull his credit. The financing spaces were not filled in correctly. When I did the math, the offer showed that the buyer was getting 100% financing. Then the addendum stated that the buyer was also asking for 6% back from the seller.

Ok, so here's the deal: The other two offers are over list price and ALL CASH offers. It does not take a rocket scientist to figure out which one the seller is going to want to go with!

Let's see: let's weigh ALL CASH versus 100% financing!!!!

I told the agent that we sent the seller all the offers. He was out of the country and would not work the offers until he returned. We alerted all the agents about this.

Then Keller Williams gets THE CALL!

The agent with this 100% financing clause in the offer starts yelling at Keller Williams- "You are supposed to send our offer to the bank!"

"What do you mean?, This is a short sale."

To which the agent continues to yell, "I looked up the tax rolls and it says that the mortgage is held by XYZ bank. You have to send our offer to the bank. The seller does not have any say in our offer."

Our broker tries to explain again that this is a short sale. The mortgage information on the tax rolls is to show who the mortgage company is. He tries to explain to her that the tax rolls clearly state that the seller is the homeowner and NOT the bank!

Then she tells him she has been doing short sales for a year now and she never sends the offers to the sellers. She just sends them right into the bank. WHAT!?

Then Keller Williams tells her that her buyer's financing does not look as strong as the cash offers but that is for the seller to decide. She then tells Nestor-

"Oh no, they are putting 3% down! They don't need the 6% back. They do have an approval letter." and on and on.

Well, if that was the case, ( and I just came back from an all day Contracts Class with an Attorney) then her buyer's offer needed to be written that way and not the way that it was.

So sometimes the buyers want to see how low they can go, how much they can negotiate and many times in our town, that will lose them the deal. ALOT of our closings are with ALL CASH transactions.



Another example of misinformation on how a short sale transaction works and even who the principles are.

Foreclosure Is NOT An Option! Call Nestor and Katerina Gasset today at 561-753-0135 for a confidential interview regarding your options.

Don't Delay! Don't Wait Until The Sheriff Is Knocking On Your Door! Pick up your phone and call us to see if you can avoid foreclosure.
Rob Alley, Realtor at Keller Williams Charlottesville
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.forestlakesliving.com/
http://www.charlottesvillevarealestate.blogspot.com/
http://www.charlottesvilleshortsale.com/