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How to bulletproof short sale counter offers

Are your counter offers airtight?

I’m not much on guns, except maybe squirt guns, when it is around 115 degrees outside. However, I always seem to use the word ‘bulletproof’ to refer to the counter offer that I write when I receive an offer on one of my short sale listings.

I guess I am using the word bulletproof in order to effectively communicate thay my counter offer really helps to assure that the buyer is still around when the short sale gets approved. One of my real estate friends alerted me the other day that she ran into a little snag with her own bulletproof counter offer.

A counter offer snag

Here is some background:
The counter offer (which is signed by the buyer before the buyer’s offer is submitted to the bank) seeks to cover all of the costs associated with the transaction that may not be paid for by the bank. Since approval of those costs is an unknown until you are approaching short sale approval, it is important for listing agents to clarify the disposition of those costs in the off chance that the bank does not approve any such fees.

The listing agent writes:
Buyer recognizes that pest control inspections, reports, repairs and clearances will not be paid by seller and may not be paid for by seller’s lien holder. As such, approval of these fees by the lien holder is not a contingency of the sale.

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Buyer signs that he agrees. The buyer’s offer is submitted to the short sale lender. The short sale lender only approves $500, and the pest control bill will be more than that. The buyer’s agent says that the bank must pay these fees as a condition of the loan.

Talk about a pickle. This is one of those times that despite the fact that the listing agent was trying to make the deal bulletproof, she was unable to do so. Changes to the loan and the fact that the buyer agreed to something that he should not have agreed to really throw a wrinkle into the transaction.

I just Googled the word bulletproof and was sent to a body armor website. I see that one of the questions on the home page is, “what level of protection should I get?” While I was not aware that there were different levels of protection for body armor, I’m thinking that the level of protection in the standard short sale counter offer may not have been enough for dealing with this buyer’s agent.

The best short sale counter offer

When you prepare your short sale counter offer, here are a few items you might need to consider: pest control, septic clearance or certification, HOA fees (including unpaid dues), home warranty, buyer’s closing cost credit, title and escrow services, and the length of time allotted for short sale approval before contract is null and void.

While no bulletproof vest may protect your client in each and every short sale, the list above is a good place to start. And, depending on your level of armor protection, you can make your counter offer as durable as needed.

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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.


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