Tampa Foreclosures Still an Issue for Buyers that don't Understand

When I'm working as the listing agent, I establish the rules.  a)1% earnest money hard after inspections are complete.  b) all contingincies removed within 15 days of effective date c) the seller doesn't accept any offer that isn't close to what an appraisal would come in ( I determine this amount)

When I'm working as the buyers agent though, I'm agressive about making sure the buyer can get out easily and that their earnest money isn't even deposited until the bank approves the contract.  Because the market has moved so quickly the past few years, I want the flexibility to move them to a better property when it comes available.  Since the banks are slooow, this is usually what happens.

The banks own most of the responsibility for the chaos associated with short sales.  I lost a deal this week because the banks can't make timely decisions.  I had a cash buyer, under contract for over 5 months at $260k.  Last week a bank owned foreclosure was listed for $254k.  My buyer's had an out and moved on.  This has happened to me a dozen or more times in the past 18 months and unforutnately, the buyers are so frustrated after trying a short sale, that they don't want to buy anything else.  This hurts us all when qualified, willing, buyers, become disgusted and leave the market.

Listing agents bear the rest of the responsibility.  In my market, the Emerald Coast of Florida, agents consistently price properties below the most recent comps.  This is "fools" gold for buyers.  They get sucked into waiting for the impossible.  No matter how much pleading and explaining that I do, some buyers just don't get it.  As their agent, I still present offers on short sales if that's what the buyers want but I'm always happy when the listing agent is "tough" and doesn't accept the low ball or lazy terms.

 

 Hey Tim...I agree with ya.  Let me give you a bit more background.  We set prices to market...not like some clown agents that throw any price on it just to get an offer.  Then when the offer comes in, we explain that we do not take multiple so that it is fair for both sides and explain that we will do everything in our power to get this deal accepted.  We have a short sale negotiator that handles this part of the process (on my payroll).

We do inform the buyers that they can withdraw the offer anytime prior to the acceptance from the bank but instruct them that if they cant wait at least 3 months, then do not bother because we can not set a timeframe here.

If at that point they still would like to move forward, then we work to the contract.  We do not expect to hear phone calls from the buyers agent 2 weeks into it looking for an update from the bank.  Hello...the update is that we are working on it!  Lots of agents that claim they know how to work Short Sales really do not know at all...very easy to spot based on how their contracts are written and the questions they ask.

You sound like you know your stuff...as we always work for our clients best interest whichever side of the coin we are on.

thanks for the comment

I've been thinking about creating a buyers disclosure for people who insist on looking at short sales.  Something like:

I buyer do by understand that banks are managed by idiots and losers. Furthermore, I understand and acknowledge each point listed below:

1.      Cash offers and high credit scores will not make the process go any faster or convince the bank to take a lowball price.  2.      The bank will probably misplace my offer and require resubmission at least 3 times. 3.      I understand that less than 1 in 7 of these things ever work out but I still want to waste my realtors time. 4.    Even though my realtor disclosed the frustrations associated with the short sale process, I still want to experience the agony first hand. 5.      The appraisal will probably come back above my offer even though the property isn’t worth what I offered initially. 6.    My agent, Tim Shepard, told me not to expect any update.  Therefore, I will not call Tim Shepard and ask for updates....EVER!