Connect with us

Hi, what are you looking for?

The American GeniusThe American Genius

Coaching

How Many Buyers Does it Take to Close a Short Sale?

Short Sale ClosingsAs I consider how many buyers it takes to close a short sale, I remember the ad where the question is posed, “How many licks does it take to get to the Tootsie Roll center of a Tootsie Pop?” (Do you remember that ad campaign?) If you actually remember the commercial, you may remember that it takes Mr. Owl three licks to completely devour the lollipop. Despite that fact, the voice over at the end of the commercial tells the viewer that “the world will never know” the answer to that lollipop question.

With regard to short sales, on some occasions you can actually close a short sale with the very first buyer (one lick of the lollipop). For other short sales, the world will never know.

It is a bit of a drag when you work so very hard to obtain a short sale approval letter and then when you get it, you learn that they buyer has moved on.

Sadly, some buyers lose faith in the process and move on–usually right before the approval is received. If this happens on one of your listings, you need to do your very best to provide another purchase offer that meets the exact specifications of the approval letter. The main concern for most banks is whether their net will be the same with the new buyer’s offer. For example, if a buyer was approved at $500,000 with no closing costs, then you need another offer (if you can obtain one) that meets those same terms. If the next buyer wants closing costs, those would need to be added to the purchase price so that the bank’s net will be the same. (It’s all about the HUD-1.) (Note that this procedure of quickly substituting a buyer is not used with Bank of America short sales being processed through the Equator system.)

If you cannot bring in another offer that nets the bank the same amount, then negotiations are delayed and revision of the approval letter could take significantly time.

Advertisement. Scroll to continue reading.

Before you go kicking and screaming because the buyer has disappeared and you have already pulled out all of your hair, here are some suggested phrases that you could add to your MLS Listing (if permitted by your local MLS) to entice buyers, after you have received approval:

  • Don’t Miss Out! Short Sale Fully Approved. Lender says MUST close in 30 days or less!
  • Amazing open house planned for this Saturday. At this FULLY approved price, home will be gone for sure!

I truly hope that your buyer can hang on while you attempt to negotiate the terms of the sale. Perhaps the tips that I have shared will help you better navigate the short sale. If not, consider passing out Tootsie Pops and see which lasts longer—the short sale negotiations or the lollipop. I’ve not tried this technique, but I’m thinking I could devour a lot of lollipops during the short sale negotiation process.

Photo: flickr creative commons by Christine J Warner

Written By

Melissa Zavala is the Broker/Owner of Broadpoint Properties and Head Honcho of Short Sale Expeditor®, and Chief Executive Officer of Transaction 911. Before landing in real estate, she had careers in education and publishing. Most recently, she has been able to use her teaching and organizational skills while traveling the world over—dispelling myths about the distressed property market, engaging and motivating real estate agents, and sharing her passion for real estate. When she isn’t speaking or writing, Melissa enjoys practicing yoga, walking the dog, and vacationing at beach resorts.

15 Comments

15 Comments

  1. Missy Caulk

    February 15, 2011 at 7:28 am

    All my short sales that don’t close is not because of the banks, but the buyers walking, like you said right before approval. Or with a change from 6% concessions to 3% concessions.

    I had 5 offers each submitted separately to a bank. Each time the buyer walked.

    Yes the negotiator was slow and by the 5th time she was tired, I was tired.

    The home went to foreclosure months ago and still not on the market as a REO.

Leave a Reply

Your email address will not be published.

The
American Genius
news neatly in your inbox

Subscribe to our mailing list for news sent straight to your email inbox.

Advertisement

KEEP READING!

Tech News

(Tech News) Auction.com has recently seen a fat cash infusion from Google, and both seek to revolutionize real estate. Again. But who really benefits...

Housing News

(Housing News) Fannie Mae is offering incentives on foreclosures, and while many homeowners are unaware, many agents are as well - time to take...

Housing News

(Housing News) Short sale agents have different tasks than a traditional agent, and the path to success looks quite different; these are seven habits...

Housing News

(Real Estate) Real estate agents are often asked how they survive the slow season, but the truth is that there is no such thing...

The American Genius is a strong news voice in the entrepreneur and tech world, offering meaningful, concise insight into emerging technologies, the digital economy, best practices, and a shifting business culture. We refuse to publish fluff, and our readers rely on us for inspiring action. Copyright © 2005-2022, The American Genius, LLC.