Short Sale Questions -- Advice Needed

By
Real Estate Services with 123 ConEd LLC -- Michigan real estate continuing education

short sale

I’m hoping that the collective wisdom of all of the experienced people here can help me. I'm a licensed broker in Michigan, but I don't know much (almost nothing) about short sales.

My wife and I are strongly thinking about buying a bigger house in our same neighborhood (located in Farmington Hills, Michigan). We looked at four houses, including one that is a short sale. We really like the short sale house.  There is already one offer on the short sale house, but the selling agent said that the bank is still entertaining offers.

I very little about short sales, so I have several questions. Can anyone help?

  • Do banks in short sale situations look more favorably on a 100% cash offer as opposed to financing? I’m wondering whether my offer would be looked at more favorably if my offer was all cash.  I'd like to make my offer look more favorable than the other offer.
  • Do I need to put an earnest money deposit down with my offer or can I say that I’ll put my earnest money down upon acceptance? If so, would it help to offer a large earnest money deposit upon acceptance to get the bank’s attention? I’d hate to have a large earnest money deposit tied up for months while the short sale slowly works its way through the bank before the bank accepts the offer.  I don't mind putting down the money once the offer is accepted.  Any thoughts?
  • I’ve heard that some homeowners in short sale transactions strip their homes before they vacate and take everything from appliances to door knobs to cabinets to toilets, etc. Is there any way to protect myself from that happening in the purchase agreement? Does anyone have any recommended language?
  • There were a few pieces of furniture that are in the house that seemed to fit certain rooms very well (e.g., a beautiful desk in the office). Is there a way to put that in the purchase agreement or would I need to negotiate separately with the current owner?  I'm not sure about this in a short sale situation.
  • Is there any disadvantage to buying a home through a short sale?

Any thoughts or comments would be much appreciated!!!! Thank you!!

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Topic:
ActiveRain Community
Location:
Michigan Oakland County
Groups:
Michigan Real Estate
Realtors®
Short Sale REALTORS®
Short Sale Specialists & Pre-Foreclosure Education
Short Sale Support Group
Tags:
short sale
short sales
michigan

Comments 7 New Comment

Rainmaker
177,738
Jason Rose
www.123ConEd.com
123 ConEd LLC -- Michigan real estate continuing education

Hi Lenn.  Thanks for your comment.  I have not engaged a buyer's agent because I'm a licensed broker in Michigan and wanted to reclaim the buyer-side commission, which will be pretty substantial.  I know there are great benefits to engaging an experienced agent, but I am hoping to do it myself even though I'm not familiar with short sales.  I'm not even sure that the short sale house is the one we want, even though we're leaning that way.  I just wanted to get a little background. 

March 14, 2011 07:53 PM
Rainmaker
177,738
Jason Rose
www.123ConEd.com
123 ConEd LLC -- Michigan real estate continuing education

Gloria:  Thanks so much for your helpful thoughts.  I really appreciate your time!

March 14, 2011 07:55 PM
Rainmaker
407,594
Karen Monsour
REALTOR, SSRS - Sells FL Waterfront, Short Sale Expert!
Coldwell Banker Fort Lauderdale Beach

Jason,

I agree with Lenn, you need to get an experienced short sale agent from a reputable firm to help you.

One suggestion I do have though, do NOT put down a large "escrow" deposit. Most people in Florida only put down $1,000. and then put another $2-3K after the offer is accepted.

Let me give you a scenario (then you'll know why you do not offer full price on a short sale unless you have a seasoned agent - YOU TRUST - that knows there are truely multiple offers - usually on short sales, one offer is presented at a time - not multiple offers as the owner has to agree to your terms prior to getting 3rd party approval).  Example:  I showed a customer a property that was listed as a short sale for $1,000,000.00.  My buyer offered $600,000.00 cash and after the short sale process was complete found himself still with that $400,000.00.

You could look on here for the state of Michigan and find an agent in your area.

Missy Caulk lives there as do Bob Stewart (AR guru) and his wife - they certainly should be able to guide you in the right direction.

March 14, 2011 07:58 PM
Rainmaker
177,738
Jason Rose
www.123ConEd.com
123 ConEd LLC -- Michigan real estate continuing education

Karen:  Thanks for the advice, especially on the escrow amount question.  I'm going to look into an experienced, trusted short sale agent if we decide to make an offer on the short sale house.  I know what I don't know, which is short sales, and I don't like making mistakes. 

March 14, 2011 08:20 PM
Rainer
157,019
Dave Sullivan
The Real Story on Your Credit Score - TheCreditGuy
www.TheCreditGuy.TV

Excellent information I will forward it if that is ok? thank you!!!

November 05, 2012 12:37 PM
Rainmaker
177,738

Jason Rose

www.123ConEd.com
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