Very timely post. We too are tired of Buyers using the inspection period as a "get out of jail free card", which I've recently written about:
1. 10 Day inspection period begins at contract Acceptance - non-refundable earnest money to be deposited with Title & Escrow at end of inspection period process.
2. CASH purchase - Buyer waives the Appraisal contingency.
It's good to hear that I'm not breaking brand new ground with this - I can point to this post to any astounded Buyer Agents!
Are You Tired Of The Buyer Walking? Short Sale Listing and Selling Strategies.
As I move around reading Active Rain comments and posts and cruise the internet I find a lot of listing agents lamenting about the buyer walked in the midst of the negotiations or right as the acceptance letter arrives for a short sale listing.
Well, that used to be one of our biggest complaints also, but that changed as the market changed.
There is no problem for which there is not a solution.
We are in the business of helping our clients. So we need to be proactive in providing our sellers with alternatives to situations that may arise.
Anything listed under $400,000 is going to have multiple offers within the first 30 days on the market. That brings into question whether this is still a buyers' market.
Disclosure: every state is different so check with your state about contract law. This article is about Florida short sale contracts.
The last straw was when on three different listings after we had gone through the entire short sale process of negotiating with lenders that do not allow buyer substitutions- and after getting the short sale approval letters- the buyers walk using the home inspection clause in our Florida AS IS contract. One buyer withdrew their offer because the garbage disposal was broken even after the seller offered to put a new one in for them.
We discussed all this with our attorney who then drafted up a short sale contract addendum. We do not use the FAR short sale addendum. It is basically useless. I don't know one attorney that likes that addendum and I have no idea why the attorneys at FAR drafted that addendum.
Since we implimented our short sale addendum we have not lost any buyers.
Do we have buyer agents call us and flip out over the addenda? Of course! But we then explain the reasoning behind our addendum.
What does our short sale addendum consist of? Some of these items were already on our previous short sale addendum. We are just listing everything here so you know what is in our addendum including prior items.
1. The buyer's deposit becomes hard at execution of the contract between buyer and seller. NOT at lender's acceptance. We tell the buyers' agents that our sellers and us will no longer work on files without the buyer committed to the deal.
2. BofA files all have a 120 day acceptance period, no less. If your buyer needs less time than that, this is not the home for them.
3. The terms and conditions of the third party lender must be approved by our seller. If the bank comes back with a cash contribution demand from our seller and our seller does not have the money- they can not close. BTW- that has not happened because we negotiate terms that our sellers can meet.
4. The buyer is to do their home inspection within 30 days of buyer and seller signing the contract, not after the third party acceptance. Of course, the sellers must keep the home in the same condition as the home inspection states.
5. If this is a cash transaction; we need to see proof of funds in the form of a bank letter, stock report, CD statement, etc. About 60% of the offers that come in on our listings are ALL CASH buyers.
6. If this is financing: then the buyer must be approved for the loan- not pre-approved.
Since this is new to most agents, we always get the response: " Well, I never heard of that before!" To which we say, "Well, now you have!" There is a first time for everything.
When a buyer does not want to pay $200 to $300 for a home inspection upfront because they don't know it the short sale is going to get approved or not- we tell the buyers' agent- that the buyer must not want the house if they are not willing to gamble a couple hundred dollars to get the home they want. Typically a family of four here is spending $200 going out to dinner every month. So the "buyer does not have the money" does not wash with us.
We have also had the seller pay for half of the inspection and the buyer pay the other half. That creates a win/win with a buyer who is hesitant because they see the seller is putting something forward also.
Disclaimer: Now I don't recommend listing agents to use this type of addendum if they do not know how to close short sales. This is for experienced short sale agents. The biggest reason we can get this addendum agreed to by buyers is because we have a reputation of closing short sales. Any of the agents here can check with our MLS to see that we close our short sale listings and that our CTG status listngs change to Pending and then to SOLD. Our closing ratio is at 98% and that is after a lot of short sales. If an agent only has one listing that closes as a short sale and they only have that one listing they can say they close 100% becuase that is true, however that is based on only one closing!
Avoid Foreclosure! Call Nestor and Katerina Gasset for Short Sale Information Today- 561-753-0135 or learn more at Short-Sales-Florida.com.
To view Florida Short Sales- Click here. We know Palm Beach County Short Sales and Port St Lucie Florida Short Sales and will help you get your home Sold if you need to Sell your home and help you buy your home in Palm Beach County Florida: Call us today.
Copyright © 2010 By Katerina Gasset, All Rights Reserved.*Are You Tired Of The Buyer Walking? Short Sale Listing and Selling Strategies*
If you are considering a Traditional or Short Sale of your home in Phoenix, Scottsdale or any location in Maricopa County Arizona, you owe it to yourself to talk with Haven Express @ Keller Williams Arizona Realty to determine whether Tony and Suzanne Marriott are the best real estate Brokers in the Phoenix and Scottsdale metropolitan area to help you with the Successful Sale of your home.
Tony and Suzanne have personally Listed, Sold and Closed more than a hundred Short Sales with the highest list to close rate in the Phoenix Metro Area!
Tony Marriott - Chief Executive Officer - Haven Express @ Keller Williams Arizona Realty
Suzanne Marriott - Chief Learning Officer - Haven Express @ Keller Williams Arizona Realty