It is scary how much misinformation there is about Short Sales. I am in the midst of negotiating an offer on one of my Destin Florida short sales. I told the buyer’s agent the seller will be counter offering.
1. The buyer’s agent was shocked, “Counter Offer!? The seller cannot counter offer. That is up to the bank!”.
Wrong. A seller still owns the property until the title transfers. A seller has the right to counter offer, accept or reject any offer. The approval of the seller's lienholder is a contingency of the contract. (The August 2010 issue of the Florida Realtor Magazine states that “The approval of the seller’s lender is a contingency much like a contingency for the buyer’s obtaining financing.” ) I explained that the seller did not want to send in the “low short sale offer and waste time”.
2. The buyer’s agent then asked me, “Does the seller’s lender know that the home is on the market as a short sale and did they pre-approve it?”
Again, “no” and “no”. These are common questions from buyer’s agents. I answered that I didn’t know if the seller told Bank of America his home was on the market. And it was not pre-approved. Sure, there are some HAFA or HUD Pre-Foreclosure sales where the sellers and price are approved in advance, but that does mean the contract terms offered would be approved in those cases, anyway. The buyer’s agent then said I could not market the home as a short sale if the lender did not know about it.
Wrong again! A home is listed as a short sale when the list price is not sufficient to pay off the liens in full at closing. (Of course, if it is a small lender, find out if their policies allow short sales before proceeding.)
3. Finally, to justify the low offer, the agent said, “Lenders accept 80% of 
value as a short sale”. BUZZZZZZZZ. Nope. There is not set percentage of value that each lender or servicer will accept for a short sale. It depends on the investor for each loan. Any percentage is based on the net to the lender anyway, not the contract price.
If you are new to short sales, study up. Join www.ShortSaleSuperstars.com, a plethora of short sale knowledge. Learn, know and grow!
It's Wendy!
Wendy Rulnick, Broker, Rulnick Realty, Inc.
Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or local 850-650-7883 ext 204
Email Wendy: itswendy@rulnickrealty.com
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Wendy is a short sale and pre-foreclosure specialist and has been featured in "Kiplinger Personal Finance Magazine" and "Florida Realtor Magazine". Call Wendy Rulnick, Broker/Owner,to list and sell your home or condo on the Emerald Coast of Florida in Walton, Okaloosa and Santa Rosa County- Destin, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Crestview, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field.
Great comments...Not sure what the rules are in Florida and I do not deal with Short Sales in Nebraska...we have them...just not anywhere near the percentage of the listings as you...We are very lucky so far!!
Wendy- don't you wonder sometimes where agents get their "information"? (I am guilty of asking if the price has been approved, because you never know.) People never cease to amaze and entertain!
Where does all this stuff come from, oh I know, the internet. Just not you! There has been a good portion of our market where they have been preapproved within a certain range. Just like with any seller, you don't offer up that number as a listing agent. Great job Wendy getting the correct info out.
Wendy,
Life would be so much simpler if eduction didn't come from entertainers and so called news people.
Let us hope people are reading what you have to say.
Bill
Mike - Glad Nebraska is faring well!
Jennifer - True, you "never" know about the price, it's just the whole dialogue that got me.
Lyn - It is amazing, isn't it?
Bill - Education. Self-education!
Wendy - very good information. Here in Central Ca our market has flipped and now the short sales out number the REO's. There is still a lot of misinformation out there, we just have to educate the buyers, sellers, agents.
I love it when agents that do not have a clue try to tell me how to do my job! If I don't know I at least go to www.ShortSaleSuperstars.com before I make the mistake of sounding like a fool!
Some agents make up imaginary rules and then complain that you're in non-compliance with said rules.
It sounds like that agent was picking and choosing the information he or she heard or misread!
Get these questions all the time Wendy. Each case can be different and by and large nothing wrong with asking the questions. Better than rejecting ridiculous offers.