How to Get Multiple Offers on a Short Sale Listing
Ark Law Group, PLLC
Bankruptcy, Legal Information
You may not feel like you have many options when you’re selling a home short. If you can’t get the full value of the home, you’re dependent on getting the approval of the lender. You don’t seem to have much control.
We’ve helped negotiate hundreds of short sales at Ark Law Group—and we know how to put the seller’s real estate agent in the driver’s seat. Amanda and I explain in this video exactly how you can get multiple offers on a short sale property, so you can choose who best to sell to.
Step #1, as in any sale, is for you to determine the true fair market value of the property using your own knowledge of the neighborhood and the home.
Begin by listing the home at the value you see for non-distressed comparable properties for a week or two. Then reduce the asking price by 1%-3% each week, until you reach the point where you begin getting offers.
This approach lets the lender know you tried to get the highest possible offer on the home.
It’s important the last listing price and the offer are close to each other or match. The Broker Price Opinion (BPO) agent for the bank will look at the last list price and assume that the offer came in around that value. If the offer was actually much lower than the last listing price, the BPO will come in too high, and the offer will be rejected. That’s why you want to lower the list price down to the offer price before you accept it.
This stair-step strategy takes a little patience—but in the end it makes approval go much more smoothly.
If, as hoped, you get several offers, you now get to decide which one to take. You can’t submit all the buyers to the lender. You have to choose one—and that takes some skill and experience.
You might think this is a no-brainer: just take the highest offer. However, there are other considerations. Sometimes a more qualified buyer at a lower price will be approved faster.
Does the buyer have any extra cash for anything that may come up in the negotiation process? For example, the lender may make a counter offer that’s slightly higher than the offer you submit. If the buyer has no room for negotiation, the whole deal will fall through.
Is the buyer making the offer contingent on the sale of another property? They’re not likely to be approved by the lender. A cash buyer is best.
Does the buyer want the lender to pay for closing costs? They’re also less likely to be approved.
The good news is if you get multiple offers, you can hold the rest as back-up if the first one doesn’t work out.
Just like the stair-step pricing strategy, finding the right buyer can be a little more time-consuming at the beginning of the process, but if you try to push through an unqualified buyer you’ll waste a lot of time and your seller will end up in a far worse position.
If you need any assistance with a short sale, you can call Ark Law Group at 1-800-603-3525. We’d be happy to help.
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