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Has anyone tried submitting a SHORT SALE package before getting an OFFER? In the world of short sales, a short sale submitted for consideration without an offer is similar to trying to create bread without yeast. Is this true or are there exceptions to this rule? An agent has attempted to put through a short sale submission to the bank before getting an offer to buy. The property has been on the market for several months now and it looks like she is just chasing the market price downward. In the depressed housing market, she tried to get some leads generated by lowering the asking price several times since the time she got the listing, yet there haven’t been any bites. It seems there’s no way to beat the game. While Jennifer is waiting for an offer, she can’t start the lengthy short sale approval process with the bank, however, once the offer finally comes in, she runs the chance of losing the buyer waiting for the bank to approve. The process of obtaining a short sale approval from the bank usually takes anywhere from 30 days to several months. During this time anything can change—the buyer can decide to cancel because the process is taking too long, interest rates could go up so the buyer backs out, the buyer may think that the seller is playing a game and holding out for a higher offer, the buyer can decide that the house isn’t what they are looking for after all. What are the chances of moving this tedious journey along faster and get to the approval when it is needed? Is it possible to obtain a SHORT SALE approval before getting an OFFER from a buyer? It is a fact that the banks have the requirement that an offer must be present with any short sale seeking approval. You will not be able to start the short sale process until the buyer signs a formal purchase contract. You can`t even deal with the "Loss Mitigation" department until you have an offer. The reason for this is that the banks will not negotiate against themselves by giving you upfront the reduced price they are willing to sell for. They want to know that they are negotiating with a buyer on the other end and that they are not just shooting themselves in the foot by prematurely agreeing to a price that could end up being lower than a buyer is willing to pay for the property. So what can the common person do? There are several ways you can go about handling this. One way is to take drastic action to generate some quick leads. Drop the price to "turn some heads" so you can get an offer in. This may mean you drop the price lower than every other house listed in the area. You have to keep dropping the price until you get interest. Once you have the offer, submit everything to the bank. If the offer looks too low, the bank will counter and you will know where they stand and then readjust the price with the buyer from there. You can try changing the price every 2-3 weeks. Your goal is to get it sold, not to get the most money. Regardless of your list price, the bank is going to rely on their appraisals and broker’s price opinion (BPO) for their ultimate value of the property. It is not very significant how low the price is because what you need most is to get someone to put in an offer. Another method of getting the short sale started without waiting too long is to have contacts with investors who will submit offers that are low, but reasonable, just to get the bank talking. These investors usually are looking to get a good deal on a property so their offers will tend to be on the lower end, but they have the means to close out the purchase and would love to buy the property for the price they offered. You are a step closer to getting to your destination with the offer from the investor. Your job is to justify the price in the offer to the bank. With the offer, you can also get the appraisal, or BPO, started on the home to get the process rolling. These investor offers can be considered what I would describe as "surrogate offers" to start the process until another offer arrives. Then if you later locate a non-investor buyer who is willing to offer more for the home, you at least have not lost much time since you’ve already started working on the file with the bank. The surrogate investor offer is also something you can use in preforeclosure cases where time is running out and the trustee sale is imminent. At that stage, you want to do everything you can to try to postpone the sale which is whatever it takes to submit a short sale package.
By: Dave Clocker
Experience real estate like you've never known before. Dave Clocker is a real estate investor who will teach you the Long Cherished Strategies That 99% Of The Population Will Never Know About How To Almost Magically Generate Wealth Thru Real Estate. He has taken these creative strategies and combined them into fun and juicy videos, special reports, and conversations with experts. Check more out at www.RealEstateWayToWealth.com
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