: An Open Letter to Short Sale Buyers

An Open Letter to Short Sale Buyers

I respond, in writing, to any written offer to purchase a property that I have listed.  This response has become a stand by!
 

Dear Short Sale Buyer

Thank you very much for your offer, but the sellers have rejected it with no counter.  You might ask why, and I'd like to explain.

The home, admittedly, does have some problems.  Those problems have been addressed in both the aggressive pricing of the home and the repair estimates by a local, licensed contractor.

You have had the opportunity to have your own contractors come in to verify the estimate or provide another.  You and your agent can easily find the comparable properties in the same neighborhood. 
 You have done neither.  (If you can't find the comps, I have a list updated weekly.)

You might believe what you read in the news, that all short sale sellers are desperate and will accept any offer to avoid foreclosure.  The seller does want to avoid foreclosure and is seeking a reasonable offer that will be accepted by the bank, or at least an offer that they can justify when negotiating with the bank.

Your offer does not represent half of the current market value of the home. So, if you'd like to submit further documentation to support your low offer, please provide repair estimates and comparable properties that have sold.  With that in hand, we'll go to the bank and fight for your offer!

Until that documentation is received, the seller will continue to entertain offers on the property.     
 
 
 
  

     
Comment balloon 21 commentsLaura Giannotta • October 05 2010 05:06AM

Comments

Nice short and to the point :-)

Posted by James Dray, Exceptional Agents, Outstanding Results (Fathom Realty) almost 10 years ago

Good information for short sale buyers. Offers that are unrealistic provide a good reason for lender rejection.

 Blooming for home buyers.

Posted by Roy Kelley (Realty Group Referrals) almost 10 years ago

Laura-I like the way you have used logic to support the position of your Seller and not just emotion. Nice touch.

Posted by Wayne Johnson, San Antonio REALTOR, San Antonio Homes For Sale (Coldwell Banker D'Ann Harper REALTORS®) almost 10 years ago

Great post! I had a buyer who offered 52% of the asking price for an REO. Gee, no research or documentation goes into the pricing of those! It went under contract two days later and closed at 92% of asking. The mindset of these people is that there is no one else out there that wants to buy. I guess we have to remind them that there are other buyers.

Posted by Kathy Denworth, Realtor in the Florida Keys, Islamorada, Key Largo (Century 21 Schwartz Realty) almost 10 years ago

Why bother?  Why not just counter back to a few thousand above list?

Posted by Lenn Harley, Real Estate Broker - Virginia & Maryland (Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate) almost 10 years ago

Short and sweet...

Posted by Joshua Zargari, MJ Decorators Workshop (MJ Decorators Workshop LI staging and home decorating) almost 10 years ago

James & Joshua - Short yes, I was walking a fine line between sweet and sarcastic!

Roy, Wayne & Kathy - People believe those late night info-mercials!

Lenn, I like the way you think!

Posted by Laura Giannotta, Your Realtor Down the Shore! (Keller Williams Realty - Atlantic Shore ) almost 10 years ago

I'd have to agree with Lenn on this one Laura.............if they would come in with that low-ball of an offer, they wouldn't get the point of the letter anyway.

Posted by Roger D. Mucci, Lets shake things up at your home today! (Shaken...with a Twist 216.633.2092) almost 10 years ago

Great letter and I thank you for sharing.

Posted by Anthony Stokes-Pereira, Realtor (Better Homes and Gardens Rand Realty) almost 10 years ago

Laura...In not so many words we should all have a prepared statement similar...buyer have to understand banks want as much of the principal pay off as the market will bare...and any offer out of the blue is not always valid for that purpose...Some banks have told me if it is not with in 85% of appraised value they are not considered serious bids.

Posted by Steve Loynd, 800-926-5653, White Mountains NH ( Alpine Lakes Real Estate Inc., ) almost 10 years ago

Roger - their agent should have told them this already!

Anthony - thanks.

Steve - I will attempt to justify any offer if I can back it up.  I've prepared my on end, and the buyers are just tossing something out there to see if it will stick.  A waste of time for everyone! 

Posted by Laura Giannotta, Your Realtor Down the Shore! (Keller Williams Realty - Atlantic Shore ) almost 10 years ago

Laura...The letter is great and I guess depending on how the offer is presented.  Depending on the sellers thoughts, I like to counter back at full price and CASH ONLY.  It does get the buyers and agents attention.

Posted by William Feela, Realtor, Whispering Pines Realty 651-674-5999 No. (WHISPERING PINES REALTY) almost 10 years ago

Many folks do not realize that not only does the seller have to accept an offer, but the bank does too. An unrealistic offer won't be accepted by either party involved.

Posted by Craig Rutman, Raleigh, Cary, Apex area Realtor (Helping people in transition) almost 10 years ago

Silly people with agents that are acting like the home is for sale in a back alley garage sale!  Like the letter but add the counter and make it known the contract you will work with.

Posted by Laura Sargent (Carolina One Real Estate) almost 10 years ago

I think you made your point with the letter.

Posted by Charita Cadenhead, Serving Jefferson and Shelby Counties (Alabama) (eXp Realty) almost 10 years ago

William - I'm trying to ask for an offer I can justify.

Craig - You are so right.  I find the sellers are often more flexible than the bank!

Laura - Good point, but I'm assuming their agent has pulled the comps and reviewed my repair estimates.

Charita - Thanks!

Posted by Laura Giannotta, Your Realtor Down the Shore! (Keller Williams Realty - Atlantic Shore ) almost 10 years ago

This is great information about how sellers and the banks thought processes work.  I appreciate you sharing.

Posted by Cody Haworth, Carlsbad Homes for Sale (Four Seasons Properties) almost 10 years ago

Great letter!   Love it.

Posted by Kathy Torline, Colorado Springs Real Estate Blog 719-287-1049 (ERA Herman Group Real Estate) almost 10 years ago

Cody - Thank you...if we only knew how the bank thought process worked, we'd be living large!

Kathy -  Thanks, I was trying to stress that I'd take anything to the bank if it could be justified.

Posted by Laura Giannotta, Your Realtor Down the Shore! (Keller Williams Realty - Atlantic Shore ) almost 10 years ago

I get a lot of responses like this when I put in low offer on short sales. Obviously I don't know if it was an Investor like myself that offered on this property but if it was have you considered the reasons for very low initial offers? Below are some benefits for a low offer and benefits when working with companies like mine. 

We are putting in low offers due to the negotiation process and realize that we will have to pay more to close on the property, the low offer also gives us more leverage to negotiate any deficiency if one arises which is very beneficial to your clients I think that all of you would agree. The benefits to you as a Realtor are the negotiation process is done for you, you are paid double commissions(on average), you would be dealing with a company that handles many deal on a daily basis and no initial marketing cost as you would always have a buyer. Above are just a few benefits and lets face it what is the goal for your clients? I'd say providing a great service, saving their credit and saving them from any type of deficiency.

I'm just putting a different twist on things and hope that some of the low offers that come in could have some great benefit for you and your clients. Your biggest challenge will be finding a good investor with great ethics. 

Posted by David Fremel (TruSolutions Real Estate, LLC.) almost 10 years ago

David, I understand that an investor would want to put in a low offer.  I'm dealing with some contract purchasers now.  They went in low, are negotiating with the bank and want to the sell the contract to someone else.  I have no problem with that.  And I will fight for any buyer who can justify their offer.  That's the point I was trying to make.

Posted by Laura Giannotta, Your Realtor Down the Shore! (Keller Williams Realty - Atlantic Shore ) almost 10 years ago

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