In our local market in North San Diego County, most of the homes listed at the lower end of the financial spectrum receive multiple offers. I frequently get calls from agents asking what they should do with these offers, how they should evaluate them, whether they should write a counter offer and what it should include.
The agent’s (and the seller’s) first inclination is to write a counter offer that includes a price. While I am sure that many of my readers will disagree, I do not feel that it is necessary to write a counter offer that includes price.
Why? Well, the bank most always determines the price of the short sale. If the bank does not like the offer, then the bank will counter (usually in the form of a verbal counter) later in the transaction. At this time, the buyer can determine whether s/he is willing to increase the purchase price to meet the bank’s demands.
Sellers occasionally feel offended because they do not like the purchase price. How could their gorgeous home be worth 60% of what they paid? How dare these buyers insult us this way?
The truth is that if you have received multiple offers on your listing, you may want to consider more than just price when you review those offers with your seller. Which buyer is going to be willing to stick around if the short sale takes a bit of time to process? Which buyer is the most well-qualified?
Often times offers are received from investor buyers who plan to flip the properties after purchase. Practically speaking, investor buyers may be the key to salvation of our national economy. Heck, an economist for the Federal Reserve Bank of St. Louis was recently quoted as saying that equity investors who can purchase properties and rent them out may be the key to cutting our recovery time.
That being said, it takes so much tenacity and discipline in order to convince a short sale lender to accept an investor offer for significantly less that market value. The short sale lenders state that the homes are being sold as-is, yet they refuse to accept much less than retail market value. It’s almost as if the mortgage lenders cannot imagine what might happen if all of the short sales currently in process end up as foreclosures. With our depressed buying pool, what will happen next?
Short sales are not for the faint of heart. That’s for sure. But, if you push the right buttons with the short sale lenders, there are certainly opportunities to get some good deals while also doing your part to help our national economy.
Photo: flickr creative commons by brykmantra