Low Ball offers on Phoenix Short Sales

By
Real Estate Broker/Owner with Phoenix Property Shoppe 602-380-4886
http://actvra.in/JP5

Low Ball offers on Phoenix Short Sales


Buying a Phoenix short saleOk folks listen up, please stop calling agents and telling them you've as good as gold, have cash, can close in two weeks etc etc etc on short sales.  Just stop!   Short sales don't work this way - they really don't.  Some short sales can take 60 days others could drag out for a year. Really.  I'm not joking. As for you having cash, well that's fine but the bank is not going to take an offer for 50% less of what they think they should realize just for you - especially if the home has been on the market for a week or two. It's just not reality. Now if it's been months and months or longer you might have a chance - might. But it's doubtful - just saying.

 

Yesterday I got yet another call just like this and we had a real hard conversation that he didn't want to hear. The guy suggested to me - hey I'm your guy who can close deals, fast and with cash so call me.  No, I'm not going to call you back unless - UNLESS I knew the bank would even consider such a low offer.  I know pretty much what a bank will take on a short sale in our hot Phoenix market and it's not 50% off. And BTW I've got two other agents that will be writing on this very property you called on and they know what needs to happen in our short sale market.

 

I am sure this guy doesn't know how short sales  really work.  It was if he was reading off a script from some short sale investor seminar he had taken recently.  Is somebody teaching these folks how to buy short sales?  No.  In the past when ever we'd get the 'zero down' calls we knew for sure another seminar promoter had been in town. Since I don't read the paper I don't know who's advertising again. Somebody is making money on short sales and it's not the attendees but rather the promoters. Folks this is the oldest trick in the book.

 

If you are new to buying short sales the best move you could make is to call a broker or agent that understands how short sales really work and make an appointment.  Listen to what she/he tells you -carefully - if you want to be a succesful short sale bidder. The agent has most likely been working on short sales for the last 4 or 5 years and knows what they're doing. Really they do. Save everybody some time and  learn the short sale ropes in your area before making 'pie in the sky' verbal offers and proclamations of how you're good as gold. If you do you just might be the successful bidder on a short sale that would make an excellent investment. Now make that call to a good short sale agent and win the bid on that short sale.

 

 

Low Ball offers on Phoenix Short Sales 




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Re-Blogged 8 times:

Re-Blogged By Re-Blogged At
  1. Michael Clarkson 10/09/2012 10:35 PM
  2. Patrick James 10/10/2012 05:42 AM
  3. Chuck Carstensen 10/10/2012 06:29 AM
  4. Ronda White 10/10/2012 07:28 AM
  5. Randy Poll 10/10/2012 07:49 AM
  6. Linda Just 10/10/2012 10:56 AM
  7. Merline D Pennant - New homes, Short Sales and Pre-foreclosures 10/10/2012 06:41 PM
  8. Winston Heverly 02/09/2013 02:26 PM
Topic:
Home Buying
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Arizona Maricopa County Phoenix
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Ambassador
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Anna Banana Kruchten
Phoenix Property Shoppe - Phoenix, AZ
Arizona's Top Banana of Real Estate!

Ben it is about managing expectations and having the current information and know-how of what works.

Susan - indeed it is!

Stacey that's almost funny cash/conventional, really?!!    We get those as well and it's like  -what planet are you from?

Valerie you are well versed on the current market.  I am not concerned about working with short sale buyers if I know the agent knows how to work them and get them closed.

Kathy that bus left the station a couple of years ago!

Marisa ahhhh those great infomercial - makes you want to make a few huh?   Naugth!

Debb they're coming out of the woodwork but that's where they'll have to go back to OR find an area of the country or another country where their 'new found plan' works.  We wish them well.

Ron sales is sales.....absolutley.  They don't need to call me - or mess with you and not tell the truth. Now why would anybody want to work with somebody who doesn't tell the truth?

Laura me either. And if they did they'd get the same chat as before - plus BTW nothing has changed but I'll call you if it does. Right.....

Chris 2 years ago that might have been a tad more realistic to 'get a screaming' deal.  Just not the case here in Phoenix with the facts I mentioned in the post.

Peter most of our buyers are cash this past 2 years. It is what is these days.

Deborah.....you did hear something so that means there must have been a seminar in town recectly. I was wondering why we were getting all this stupid calls!  And I was pretty sure it was the seminar scene once again.

Wendy oh yes there is that crowd as well.  As a matter of fact I received two emails today suggesting that very thing.  No thanks!

Travis those of us who have been around the block a million times don't fall prey - and we know how to ask the right questions to smoke them out fast. Hey - I like your pic - looks alive and fun!

Todd it takes a lot of explaining and almost to the point of talking them out of it.....so they get that it will try their patience and then some.  And when it does not go as they kind of thought it should they are not suprised but rather prepared to deal with the situation much better. Buyers need to be very committed to short sales as well.

Brad cash is just fine if it comes along with solid proof of funds.  But cash doesn't always win the bid if there are muliple bids and somebody else that is well qualified bids higher.....and perhaps has lost out on many other offers. They're more willing to hang in there and get it closed.

Steve - preaching to the choir. Say it isn't so!

Marcy - every seasoned or well prepared investor has a plan of action. And yes, you know which ones are wasting your time, dont you!

Bill - lol haven't heard that term in years!  Perfecto!

Randy - exactly. Our clients look to us  for advice- that's why they hired us in the first place because we know how to help them as best as possible with the short sale.

Terry - yes but they are much mistaken as most of us know and have expeienced.

Anne I don't think we're bashing investors as most of us are investors.  What I am saying is ask for seasoned advice and deal with the real facts of the local market.  Theh phone calls I'm talking about are not really investors but rather the folks who are talking whatever seminar and thinking 50% low ball offer is going to work. It's not.

Valerie has I say 'that Bus as left the station a long time ago'.  Multiple bids, over list.....for at least 1 1/2 years or so.

Marte the market has shifted from even the last 6 months in Phoenix. That's why it's so important to have current market info and agent that knows what to do.

Hans - you feel their pain in other ways!

 

 

 

 

 

 

 

 

Oct 10, 2012 01:10 PM #115
Rainer
150,612
Malinda MontgomeryRSPS AHWD-Realtor Singer Island,FL.
One World Realty Inc. - Singer Island, FL

Hi Anna, I guess they don't realize for 50% off everyone would want it. If that was reality, I'll take 2! Thanks for a great .post

Oct 10, 2012 01:26 PM #116
Ambassador
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Anna Banana Kruchten
Phoenix Property Shoppe - Phoenix, AZ
Arizona's Top Banana of Real Estate!

Robert home buyers in Phoenix know after a few trys at winning a bid that low balls certainly won't work and for goodness sakes you most likely will need to go over list price - again - all things being equal as I mentioned already.

Deborah yes I agree it's been a long hard ride for almost everyone and we're far from over the journey.  Many folks in my area are still way underwater and the tax bill needs to get extended for several more years to help these folks out.

Terry as you know, not all agents understand the ins and out of short sales.  In fact most agents working them now had never done one previous to 4 or 5 years ago. They all need to learn from someone if they're open to it.  I've done shorts before the downtown but I'm hear to say there were a 'piece of cake' back then - and no where near what they're like now.  It was a learning curve for all of us.

Steve - agreed. 

Denise - just don't take them on as clients until they listen to your advice and look at the facts of our market.  I don't.  I have lots of other ways I could waste my time.......lots!

Scott good for you for getting the education and quidance of an attorney.  Smart move.

Flavia - now that's funny.  Perhaps there is a seminar for cars?

Kimo - our sellers are not going to waste their valuable time with a low ball offer when they know full well - in our hot market - that a reasonable offer and perhaps over list price offer is right around the corner.  Every state handles shorts their own way.  We have a short sale addendum that handles it quite nicely for sellers and buyers.

Kathy - yes that is a extremely necessary fact to make sure is worded correctly to protect our clients. 

Dorte that is certainly the case here in Phoenix as well.

David - agreed!

Elisa - not with me!

Thomas I have heard that for many years.  And there are some teachers who are legit and teach the real facts - and then there are the others.  I am a teacher myself and give it out straight.

Debbie - all you have to do is wait a little longer and there will be a realistic buyer - in my market.  Agents here know this, if they don't know by now, they've  not been selling real estate and getting turned down time after time with stupid low ball offers.

Shane happens all the time!

 

 

 

 

 

 

 

Oct 10, 2012 01:38 PM #117
Rainer
228,886
Lehel Szucs
All Seasons Real Estate, Inc. - Covina, CA
REALTOR of choice

yup ... the days of lowball offers are long gone ... make a market offer or get out of the way

Oct 10, 2012 01:44 PM #118
Ambassador
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Anna Banana Kruchten
Phoenix Property Shoppe - Phoenix, AZ
Arizona's Top Banana of Real Estate!

Dawn - same here and it's the same script!

Bill - cash isn't king or queen so much in our market.  Case in point we recently had a bunch of offers on a traditional sale but the seller took the highest one with a 100% FHA buyer rather than a cash deal at $10k less.  It closed just fine.

Dominion - you got it!

Gene - it doesn't at all anymore.

Bryan I think it's a matter of qualifying short sale buyers and educating them to the process. We do both and yes they can be a real pain at times....but normally they close.

Anja - agreed!

Gina we're seeing investors holding for 5 to 7 now more than flipping.  

Ann - agreed if all things are equal.  That happens more often than not - and we know they buyers will hang in there because the lost on 5 or 10  bids already.

Nathan - maybe they just woke up from a very long nap!  

 

BTW - for agents wanting to learn how to short sales go to www.shortsalesuperstars.com 


Inna - yes those are the calls.  No thanks best you find your own representation.

Bob - that is true as long as it closing who cares if it's cash or financed.

Lou from Marco Island - nice place!   Me tough?  You think so?  Just saying it like it is in my market. If that is tough well then I guess I'm tough!

Rob - exactly.

Nan I wouldn't say that now in my market.  Back 5 years ago - for sure I would have.  Processes have gotten so much better the last 2 years and we've had happy successful short sale buyers - close. Maybe it makes a difference in other markets?  That would be interesting to read about.

Adrian - stand in the line and be prepared to be there for a very VERY long time!

Melinda thanks for stopping by!

Malinda - exactly!  In fact buy a dozen for goodness sakes!



 

Oct 10, 2012 01:56 PM #119
Ambassador
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Anna Banana Kruchten
Phoenix Property Shoppe - Phoenix, AZ
Arizona's Top Banana of Real Estate!

Lehel - a waste of everybody's time when the market is red hot, the backlog of buyers is long and cash is cheap.

Oct 10, 2012 01:57 PM #120
Rainer
6,585
Darcy LaFountain, GRI
Lang Realty - Delray Beach, FL
Going the distance...
I am tired of agents low balling list price to get process started. This only frustrates the Buyer. Banks know market value.
Oct 10, 2012 02:25 PM #121
Rainer
5,390
Theresa Montgomery, YAZL
NBAndrews & Associates - Mesa, AZ

Great post! Cash is not always king, especially if it is lowball, and even more so if it is in a hot market like Phoenix.

Oct 10, 2012 02:29 PM #122
Rainmaker
658,490
Evelyn Kennedy
Gallagher & Lindsey, Alameda, California - Alameda, CA
Alameda, Real Estate, Alameda, CA

Anna:

I don't understand why an agent would not know about short sales and the length of time they take.  Those agents must be new or have never helped their client buy or sell short sales.  They are a breed of their own.

Oct 10, 2012 04:33 PM #123
Rainer
120,761
Merline D Pennant - New homes, Short Sales and Pre-foreclosures
Regal Realty of the Treasure Coast LLC - Port St Lucie, FL
New City, New Towns, New homes

Anna you are so RIGHT.  I am tired of these investor cash buyers too.  I was a member of an investment club for about 3 years before I became licensed.  I never felt comfortable with thier techniques.   When I became licensed I stopped being a member. 

It is great for me however, because when they call I can here their pitch a mile off and I just shut them down.  the deal has to be CLEAN AND CLEAR otherwise it is no deal for me.    Lucky for me I did not invest too much cash and time in their training, but it gave me good insite as to how they operate.   I have even been able to help a few customers save themselves from getting entangled with their web of hotshot pitches. 

Oct 10, 2012 06:34 PM #124
Rainer
69,851
Shane Willis
Re/Max OB - Pensacola, FL
MBA, CDPE, CIAS, E-Pro

Ok I want to say I agree with the general statement and have represented quite a few short sellers. We need it to be REALISTIC..........BUT..........I do not want an all or nothing mentality since real estate is very fluid. I have seen some selling agents tell me that they comped out their listing and the price is the price is the price....basically offer full price (or REALLY close) or find another house.

Although I can see logic in this I have to say it is not ALWAYS the case.

I worked with an investor of mine (we have probably bought 9 houses together), and we examined a short sale that was listed at 79k. When I comped out the listing it really did comp out at about 80k. The issue was it had flood damage and had mold on the property for about 1 ft up the walls....all the walls. We had our General contractor give us a bid on what it would take to repair the entire house (there are other repairs needed). It came up to about 20k in repairs. When I called the other agent and told her we were coming in at 57k and I would submitt the contractors estimate I was told do not bother my seller is not signing that as you are just trying to lowball. In actuality we are not trying to lowball there are just massive repairs needed. I have seen the banks really take a look at a contractor report for repairs when submitted to the sellers bank.

I don't want to have people lowball offers that are unrealistic.....but if a price can be justified to the bank then by all means......As long as you can show the bank why.........Thoughts?

Oct 11, 2012 05:49 AM #125
Rainmaker
88,602
Kathy Dowd
World Realty, 239 220 4133 - Cape Coral, FL
Realtor Search Cape Coral & Ft Myers FL Homes for

Bottom line here we are all Realtor! Not the bank, judge or jury! All offer should be presented period! BPO is just another Realtor Opinion! Not an appraisal! Let the bank decide what they will or will not take! How many of your have had a appraisal come in low and hurt your deal? I know here in Florida, its been a big problem.

Oct 11, 2012 06:22 AM #126
Rainmaker
187,067
Anne Johnson
RE/MAX Austin Skyline - Austin, TX
Austin Realtor | HookemhomesATX (512)917-5260

I am in one of those "short sale" seminars as we speak -- trying to get a grasp on what "they" teach to investors.  Nice post.

Oct 11, 2012 08:49 AM #127
Rainer
118,790
Bill "Waz" Wasowicz
Wizards of Waz Real Estate - Maricopa, AZ

In the Maricopa market, most of the agents are double ending their short sales so even if you submit a competitive offer, you will be turned down. I have started tracking these very closely and have found that the majority of them are closing at well below market value and then being "flipped". In other words, the listing agents are writing their own lowball offers to see how low the lender will go. All you have to do is watch the closings on the Hot Sheet and look at the detail on the closings that are double ended. I guarantee you that most of them are short sales and even though they use another agent in their office to write (admitting guilt to me), it's not fooling anyone.

I question how legal/ethical it is to turn down higher offers in order to submit your own "lowball" investor offer and even asked Commissioner Lowe about this. She didn't have an answer.

Oct 11, 2012 09:11 AM #128
Ambassador
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Anna Banana Kruchten
Phoenix Property Shoppe - Phoenix, AZ
Arizona's Top Banana of Real Estate!

Darcy it can create a bigger mess for the seller which could cause a lot of financian and tax problems for them. Seller needs to make the best decision possible for their situation.

Theresa - agreed

Evelyn not sure which agents you mean.   I'm talking about the calls we've been getting lately and those are buyer calls.

Merline - clean says it all.

Shane sounds to me the listing agent on the mold property did not handle the listing very well. Had they done so it should have been priced accordingly.  And clearly the seller should have had some bids on the repairs/costs that should have been give to bank represenative.

Nancy the seller make the decision on if they are going to accept an offer or not.  We do not submit more than one offer to bank. We submit the best offer to the bank and if there is a good back up we keep it in play just in case.

Anne let me know how that semiar went. Interesting.

Bill this is not what this post is about.  What you're talking about is an entirely different post! 

 

Oct 11, 2012 12:45 PM #129
Rainmaker
92,519
Fred Sweezer Sr.
Hud Certified 203K Consultant - Long Beach, CA
Certified Home Inspector

Realty sets in at some point regarding the shortsale porcess, your post seperates the experienced, thanks for your post.

Oct 11, 2012 08:26 PM #130
Rainmaker
340,922
John Juarez
Prudential California Realty - Fremont, CA
CDPE, ePRO, SRES, GRI, PMN

 

I don't have time to read over 120 comments that this post has garnered. In any event, I know that my comment is an echo,  many times over, of what has already been written. I am posting anyway because your post is sooo true. Offers on short sales need to be in line with the market or the seller is at risk of a foreclosure after the bank comes back with a counter offer and the would-be buyer refuses to step up. That buyer wanted a deal...not a house, not a home, not a rental, not an investment but a steal-of-a-deal. Do Not Waste My Time With That Type Of Offer!!!

 

Oct 16, 2012 03:30 PM #131
Rainer
34,552
Kenneth Young
Uni International LLC - Virginia Beach, VA

Anna B -  You are correct.  True investors would never call upon an agent that has a listing for a short sale nor would they call an agent to submit an offer on a short sale.

There are two kinds of people that would call a listing agent of a short sale stating they have "cash" and can close quickly.   One would be the inexperienced Buyer that doesn't understand the process of a short sale, the other is one that is fishing, trying to find out more information concerning the listing.

Currently we have 500 REO properties under contract in Florida, some were listed with Realitors, some were not.  We received the discounts that those that call Real Estate Agents dream about.  But because we buy in volume we get huge discounts off the Market Price.   We in turn will sell them to End Buyers at a discount, but nothing compared to what we paid for them.  Happens all the time.

But it will not happen with those Buyers who have "cash" that are calling Real Estate Agents looking to pick up single properties at a time.  It is probably best for RE agents not to waste their time with these people.

Oct 20, 2012 12:24 PM #132
Rainmaker
263,650
Wayne B. Pruner
Oregon First - Tigard, OR
Tigard Oregon Homes for Sale, Realtor, GRI

I remember a call from an "investor" once and he said he had all cash and could move fast on short sales. I prequalify people. He failed right off the bat.

Dec 03, 2012 09:40 PM #133
Rainmaker
1,139,194
Lisa Von Domek
Lisa Von Domek & Associates LLC, Real Estate Broker/Associate with Real Living Real Estate Group www.LisaVon.com - Dallas, TX
....Experience Isn't Expensive.... It's Priceless!

Hello Anna,

Words that always make me cringe when an agent tells me (on a short sale listing)  "I am sending you a CASH offer!"  Actually, make that on any listing....

Feb 21, 2013 06:15 AM #134
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