Things To Remember When Making An Offer On A Short Sale
Recently I’ve submitted an offer on a short sale listing in St Petersburg. As typical, seeing that the property has been on the market for a couple months, we went a little below the list price, but within reason. I could find several comparable sales in the area to support my buyer’s offer. After dealing with countless offers and closed contracts on so many short sales I was sure the seller will simply sign and the listing agent will pass the contract on to the lender for approval or counter.
After chasing the listing agent for nearly a week, she finally told me the seller won’t sign it because it is too low. I was puzzled, I assumed the seller would be interested to get the process going and even if the deal wouldn’t happen at least they’d know the approved value and could market it as such. My buyers were upset, but decided to offer higher, after a couple more days the listing agent advised she already received a higher offer than mine and it was accepted. I’ll never know if there was something “fishy” or unethical going on on behalf of the listing agent, but the situation did remind me of a few important things:
- During the short sale process (or pre-foreclosure) the seller is still the rightful owner of the property and has homeownership rights.
- The seller can deny, counter or reject the buyer’s offer without explanation, and your offer will not be submitted to the short sale lender.
- We may not know all the details and reasons for the short sale listing, and we often don’t know the motivation of the seller.
- There’s a chance the listing agent is not experienced working with short sales and may give the seller advice which will not be in their best interest.
- Nothing is guaranteed in short sales.
- Many short sales will not close, the seller will be foreclosed on, the house taken away, the owners will be kicked out, buyers will be upset, listing and selling agents will have worked for nothing not making a dime.
Nevertheless, short sales are still good to pursue. If you have a little time to wait and not in a hurry to close, you will typically buy a home for as much as 10-25% below market value. So, during this time when the inventory of homes for sale in St Petersburg (and all Tampa Bay) is really low and good quality listings go within days, putting an offer on a short sale may not be a bad option after all.