Don't Waste Your, or My Time! (more importantly--our buyers and sellers time)

When you are looking to place an offer on a short sale, give real consideration to what your offer will be! Don't just assume because it's a short sale you can make some crazy offer on the property. Agents, please advise your clients in the right direction. Don't try and be the hero and say, "yeah, let's put that low offer in!"

Here is the deal. A short sale, as we all know is when a lender accepts less than the amount owed on the house. But remember, they still look at market value. A $250,000 offer on a $389,000 listing tells me two things; one, the agent that made the offer has no idea what they are doing, and did no homework at all before making the offer, and two, the buyers are just out to steal something, and are not really serious about buying this property. (Three, the listing agent is way off on the list price).

The graphic I made below gives guidelines on how to present an offer on a short sale based on fact, not the hype of trying to steal it. The market value argument is something short sale agents have to fight over and over again, so I sort of know what I am talking about.

Different areas of the country may have different market fluctuations, so your percent may change a little, but you get the general idea. A good agent knows how much his or her market has dropped and anticipates the drop or increase in the near future. This will help when formulating your offer on that short sale. Use recent sold comps, and explain to your buyer what you feel market value should be at.

I speak from experience when I say that anything other than fair market value; you're wasting everyone's time. Again, under full disclosure on my part, I don't know the situation in your area, but I bet this guideline will work in most places in our country. Market value is the moving target, but I can assure you it's not that big of a target. By the way, repair value decreases should be valid and not insignificant. The toilet paper holder missing does not constitute a $10,000 drop in price!

Please try to understand that this is not a slap to people wanting to put low offers in on short sales. Sometimes things are just not understood. This is why I created this graphic so that everyone could understand visually.

Short sales are quite a bit of work for all parties involved. It's emotional for the buyer and the seller, and to proceed forward on an offer that will never fly is just silly.

When calculating offers for your clients, or if you are the buyer, please have "reason" behind your offer and make it make sense.  Provide your comps to the listing agent if you think we're wrong on our evaluation.

FRANK WIBLE
SHORT SALE SPECIALIST
RE/MAX All PROS
856-745-7700
fwible@remax.net