Sell Your Home Now Q&A

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Sell Your Home Now Q&A

Saturday, November 14

Buyer’s Objections & FAQ

How to Answer Them

Simplified

Question: I can't wait that long:

Answer: I'm sorry you feel that way, but any short sale property you put an offer in may take the same amount of time. As you know, Lenders are extremely over loaded with properties in default and they are working as fast as they can to get your offer processed and approved.

Question: The value is going to be less by the time the short sale is complete:

Answer: If you believe that will happened then I recommend you make your offer reflect a slight decline in the market, that way you will still feel like you're getting the property at a fair price

Question: What if the property incurs more damage when and if it's vacant?

Answer: That can possibly happen. There is nothing I can do to prevent vandalism from happening. If that occurs you can always withdraw your offer.

Question: If I have to extend my mortgage commitment I'm walking:

Answer: As you knew at the beginning of the short sale process, it may take a while for the foreclosing lender to get to your file. Please know that they are moving as fast as they can and are doing their best. This is a great house and you are getting a great deal so I would hope you are willing to get an extension from your mortgage company.

Question: I want the bank to pay for repairs:

Answer: Unfortunately most banks will not pay for repairs since the property is to be purchased "AS IS". What I recommend you do is before you submit your offer have your contractor walk through the house and give you repair estimates. After that, make your offer inclusive of those repairs.

Question: I'm not paying a 3rd party loss mitigation fee for negotiating a short sale:

Answer: The fact is that this 3rd party is really a team member. They work extremely hard to make sure this transaction closes. Their average time waiting on hold and working to get us paid is about 4 hours. I don’t know about you, but typical attorneys, title agents or real estate agents don’t have the expertise or the time to handle this transaction as well as they do.

Question: I know the second mortgage is requiring 10% of the principal on their

mortgage in order for them to produce a release; however I won’t pay anything extra for a 2nd mortgage or a junior lien for the property:

Answer: Typically 2nd mortgages are requiring10% or their principal amount in order to release their lien position however most 1st mortgages only “typically” pay a total of $2500 to a 2nd mortgage holder (or junior lien holder) so it is likely you will have to pay the difference (10% minus the $2500). What I recommend you to do is make your offer inclusive of this fact.

Question: The property has been listed AS-IS. Can I still request a due diligence

period for inspection?

Answer: As the Buyer you can have your agent make any requests that meet your needs. Just keep in mind that the Seller has listed the property as a short sale in AS-IS condition because they are having a financial hardship. They cannot afford to make any repairs, installations, pay for a home warranty, termite inspections, surveys, or make any improvements to the property. The Seller’s situation in no way impedes upon your rights to request a due diligence period for inspection. Ultimately it is the decision of the Seller to accept or counter your offer.

Question: Can I put in an offer with financing, appraisal, or inspection contingencies?

Answer: Yes, you can submit any offer that meets your needs. The Seller may accept, counter, or reject based upon their needs.

Question: Does the Seller have to submit all offers to the lien holders for review?

Answer: No. The Lender(s) or Bank(s) being asked to approve the short sale are not a party to the agreement. The home is owned by the Seller. It is there choice to send or not any offers received.

Question: Who determined the list price?

Answer: The list price has been determined by taking into consideration recent sold comparables and any repairs needed by the property. Since it is below the amount required to pay-off the Lien holder(s), it has been listed as contingent to their approval.

Question: If an offer has already been submitted to the lender for review, can I make a back-up offer?

Answer: The answer to this question depends upon the real estate rules in your

particular state as well as whether or not the primary contract has been accepted or, by terms of the offer, is considered binding. Keep in mind that despite the status of the primary offer, all offers received have to be presented to the Seller

Question: I am unrepresented and want a break on commission…

Answer: Please know that in a short sale the commission is actually paid as a

reduction in the net to the foreclosing Lender or Bank. You may feel that you are

financing the commission within your purchase price. However, the truth is that if we reduced the commission it would only mean more net to the lender and not a reduction in the amount you finance. Be sure that the total purchase price you offer is truly the amount that you wish to pay for the property and let the Lender worry about the commissions.

Question: I want seller concessions or a seller contribution to closing.

Answer: You can request seller concessions. Seller allowances are subject to lien holder(s) approval just like all other parts of the process. Should the lien holder not allow any seller concessions and you are unable to roll your closing costs into your loan, be prepared to bring money to closing.

Question: Can the short sale processing fee be included as a closing cost to the

Seller?

Answer: Yes. You can request that the Lender or Bank allow the seller to provide a small percentage to you as a seller concession. If the Lender or Bank allows seller concessions, you can apply that to your closing costs. Provided there is an agreement in place between you and the 3rd party processing the short sale, the fee can be added to the HUD settlement statement as a Buyer Paid closing cost covered by Seller concessions.

Question: Are all offers contingent? To what?

Answer: All offers made on short sale listings are contingent to Lien Holder(s) approval of a short sale at terms and price acceptable to all parties. Be sure that a clearly written contingency is included in your offer.

Question: Why should I wait through the long short sale process if the terms from the lender may be unacceptable to the Seller?

Answer: The likelihood of the terms being unacceptable is a risk you should measure before placing an offer. Keep in mind that you may be able to get the property for a sizeable discount.

Question: Do I have to put up earnest money?

Answer: Yes, you should put up earnest money. Lender and Banks like to see that Buyers are vested to the purchase. However, you can make requests in your offer regarding the dates that earnest money will be provided to the holder and deposited. It is in the best interests of the Seller to require earnest money be deposited upon acceptance.

Question: If the bank rejects or counters, do I get my earnest money back?

Answer: Yes. Any disputes over earnest money should be brought up with the

Brokers involved.

Question: Do I need to be pre-qualified for a loan or show proof-of-funds?

Answer: Yes. It is important to the Seller and to the Lender or Bank to see that you

will be able to perform. Offers on short sales that do not have either are not regarded

as serious and are many times passed rejected by Lenders or Banks.

Question: When is my offer binding upon all parties? & when does due diligence

begin?

Answer: The Date of Binding Agreement and start of due diligence is determined by the real estate rules in your state and the presence of any special stipulations added to the offer that clearly defines the time-period for both. For contracts to be enforceable, all time-lines must be clearly explained and accepted by all parties.

Question: I negotiate short sales myself, why can’t I negotiate my own offer?

Answer: Since you negotiate short sales you will have an even better understanding than most of the hurdles that may need to be overcome in the process. The Seller has already chosen someone to negotiate on their behalf. Should they need your assistance, they will be certain to contact you. In the meantime, you will be provided regular updates as to the short sale progress.

Question: I won’t make an offer until the short sale price is approved….

Answer: We understand. However, most short sales require an offer be presented to get approval. Should you submit an offer, you would be helping to accelerate the short sale process. Make sure that any offer you make takes into consideration current sold comparables, competing active listings, and the repairs necessary.

Crystal Gomez, M.A

Trilogy Property Solutions

13636 Ventura Blvd Site 324

Sherman Oaks CA 91423

818-571-4655 cell

888-571-7854 fax

www.go.managemyshortsale.com

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Website:	http://www.go.managemyshortsale.com
Phone:	818-571-4655
Fax:	888-571-7854

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