by Sean Hess (Sean@StAugTeam.com), Broker and Manager for St. Augustine Team Realty (www.StAugustineTeamRealty.com). Join us on Facebook.
Listen to Priceline's William Shatner: don't be afraid negotiate that price!
Can you negotiate a “bank approved price” on a short sale?
Yes you can.
Here’s what usually happens in the short sale process.
We list a home for sale (the home is a short sale). We list it for market price based on its condition, location, etc. A buyer comes in a makes an offer, and then we send it to our negotiator (an attorney’s office).
Time passes. Sometimes a very looooong time passes while we and the negotiator work on getting the terms of the short sale offer approved by the bank.
On many occassions the short sale comes back approved. And on many other occassions the short sale comes back at a price higher than the offer price, or with different terms.
When the short sale is approved at a higher price, many times the original buyer walks.
So we put it back on the market at this higher “bank approved price.”
Sometimes the “bank approved price” is in line with the market. Many times it is not.
That’s where we get to the negotiation part on a “bank approved price.”
Part of the bank’s education on a particular home is getting enough offers at the same price to finally approve it. So if they say they will only take “X” but every offer they get is at “Y,” they may eventually approve “Y.”
Or they may foreclose, which happens sometimes. Or sometimes the short sale offer takes a completely different route through the bank’s short sale department, passes under a different set of eyes, and gets approved.
On rare occassions the Realtor will know if the “bank approved price” is really firm, in the sense that they will specifically instruct you NOT to bring a lower offer. Heed those warnings, because otherwise you’re wasting your time writing the offer.
Alternately, a short sale offer will be submitted at a “bank approved price” and will be rejected by the bank anyway, for reasons known only to them.
Buying a short sale is not for the faint of heart, so contact St. Augustine Team if you want to work with agents experienced in short sales, or call Broker Associate Kate Stevens at (904) 377-2276.
