I recently received an email from a short sale seller in Massachusetts and she had a very good question. In a nutshell, she has her home listed as a short sale and is not receiving any offers. She wanted to know how to proceed. Personally I’m wondering why she is reaching out to me in California. But, her question has an easy answer, and I am happy to respond.
While summer is a great time to buy a home, it’s entirely possible that many people are vacationing and not out looking at homes. But no matter what, she property still needs a buyer–fast. Why? Most short sale sellers are facing foreclosure and if there is no short sale file (complete with offer) at the bank, the bank will very likely foreclose.
Price Reductions
So, in order to avoid foreclosure and get that short sale package to the bank (complete with an offer), the easiest course of action is to lower the price at regular intervals until the property starts to attract buyers.
That being said, the bank is not going to accept a short sale offer of fifty cents on the dollar. But, if the property has been listed and there are no buyers, a skilled listing agent or short sale negotiator could make an argument that only when the price was lowered did the property begin to receive some interest from creditworthy buyers.
One other issue to consider is why there are no showings or buyers. Oftentimes, buyer’s agents have difficulty gaining access to certain properties, and this could also hamper the ability to find a buyer. Perhaps the tenant is not giving access to prospective buyers or even locking the screen door so that there is no access to the lockbox. (Yes, I’ve seen it all.)
If you have a short sale listing and you are not getting any activity, do not dilly-dally or ride those swan boats in Boston. Lower the price. If you wait too long and submit an offer to the bank shortly before foreclosure, it may be too late. When working short sales, you have got to be fast. And, in the case of obtaining offers, time is definitely of the essence.
Photo: flickr creative commons by David Paul Ohmer
Gia Freer
August 10, 2011 at 2:03 pm
Melissa, I agree that regularly dropping the list price to ensure that it is the most attractive active listing in the neighborhood is one of the biggest drivers to getting a short sale under contract quickly, but I also frequently see short sale listings that lack sufficient persuasive content (be it photographs or compelling comments – a prospective buyer has no idea what the property offers – is it updated, what kind of flooring, etc.) and most likely have not been widely syndicated either, so I would add those suggestions to the Massachusetts short seller's checklist mix as well. Price, content and syndication. A final suggestion assuming all those boxes have been checked off is work the neighbors and elicit their circle of influence to help find a buyer – you never know if they have a relative or close friend wanting to live nearby.