Short Sales in a Seller’s Market
In many parts of the United States, the real estate market has transitioned from a buyer’s market to a seller’s market. Low inventory plagues many locations and is beginning to drive home values upward. Buyer and their agents face stiff competition when writing offers, and many buyers are offering on several homes before successfully entering into a single contract.
Three Reasons that Cash Isn’t King
With such competition for a home, you’d think that the highest offer is the best one and that cash is king. When it comes to short sales, here are three reasons that the highest offer may not be the best one and why cash may not always be king. (Listing agents, take heed.)
- Is the cash buyer willing to stick around? Everybody knows that there is nothing short about a short sale. Will the cash buyer be willing to wait patiently for the short sale approval letter(s)? Or, is the cash burning a hole in the buyer’s pocket?
- Does the offer come from an entity, such as a Corporation, a Trust, or an LLC? Some short sale lenders have specific guidelines prohibiting the purchase of a short sale by an entity. Before accepting an offer from an entity, investigate whether the short sale lender will allow the purchase.
- Is the buyer requesting that the short lender allocate costs for items such as pest control, septic repairs, or closing costs? Often times, the short sale lender will not pay such fees. If that happens, will the buyer continue with his or her purchase of the property?
The best short sale buyer, as long as he or she is well qualified, is the one that is willing to stick around the longest. It’s the buyer that has visited the home several times and already selected the paint colors and considered the placement of the sectional sofa. It’s the buyer that’s willing to be flexible when the short sale lender suggests alternate terms and conditions. So, the next time you write or review offers on a short sale, keep in mind that it’s not always cash that’s king. Sometimes it’s dedication, devotion, and loyalty.