I have buyers interested in looking at a particular home that is listed as a short sale. In their price range, this is not at all unexpected. I have explained the process to them and they realize that banks are not into making repairs or losing any more money on a sale than necessary. At the same time, they are first time buyers with limit funds and they need a clear idea of the costs involved in any potential purchase.
The listing of the house in question has agent remarks indicating that the "bank will not pay for termite or city occupancy requirements" and that the "buyer is to waive these requirements." Why would a listing agent make such an assumption?
I am not new to short sales and REO's and have successfully closed a number of such transactions. What I don't understand is why so many listing agents make the blanket statement that "the bank won't pay for anything" and the property is being sold "strict as-is". In my experience, this has not necessarily been the case.
If you have a short sale listing, don't throw up road blocks and obstacles before you even get an offer. You want to get your client out from under the house and sell it as quickly and easily as possible. In this neighborhood, termite and city occupancy issues are almost always paid for by the seller. Of course it's possible that the bank will refuse to pay for them, but at least ASK! Before telling prospective buyers that the bank won't pay for this or that at least find out what costs are involved.
Have the property inspected for termites and city occupancy issues and find out what work needs to be done and what the associated costs will be. You can go even further and get repair estimates for any issues the seller is aware. Put EVERYTHING on the HUD-1 that you give the bank. If presented correctly, there is a good chance that the bank will cover many if not all of these items. Even if they won't, you've at least given your prospective buyers a clearer picture of the potential costs they may incur and run less risk of the deal falling apart later due to unforeseen issues.
Buyers- talk to me about the best way to structure your offer. Finding out what the listing agent's process is for handling short sales will go a long way to getting one accepted.
Broker Associate
Keller Williams Realty, Los Feliz
213-215-4758
http://www.LApropertySolutions.com
Jenny: So nice to see you on Active Rain! I think you are giving very wise advice. When I have stagedREO properties (which the bank paid for, BTW) the bank has been willing to listen to all offers. They may not accede to the requests, but they have agreed to a few that were reasonable. It never hurts to ask.
Your right that it never hurts to ask and I think we are obligated to do so. I would think we would make every effort to do our best at negotiating for our clients.
Hi Wayne- I'm with you. We should absolutely ask for everthing. I think the listing agent should be asking the bank for everyting in this situation as well and not simply assume they will not pay for what are generally considered "normal" seller expenses.
Hello Jenny, how are you? good article, I feel like you, the bank would pay for some items, termites, roofs and such.
The challenge is to get the bank to accept offers that have these conditions. Once a bank accepts an offer, if there are inspections contigencies, the bank would work with you rather than star over again.
Do you know of a good BPO companies I can register with or any companies that assign REO listings?
Thank you very much;
Jorge