People entering the market (those who haven’t kept up with the news and buzz about short sales and bank foreclosures), many think that short sales [often referred to as quick sales by those new to the experience], are quick and easy with the banks.  To many of you reading this, it’s probably a review, but I still uncover many would-be buyers in my travels who are still unfamiliar with the process or even the definition of a short sale.

As a listing agent of over 20 short sales at the present, I find myself answering many questions again and again on the short sale process.  The primary being, “what is the offer, I’d like to offer higher and beat the existing offer.”

In their minds, and even my own, this strategy makes perfect sense.

But why doesn’t it work?

I think Tara-Nicholle Nelson at Inman nailed it on the head (with several points), although I’m not in agreement on the point about the commissions.  We have first hand experience working with banks, and we’ve actually tried substituting a higher offer to the bank… only to fail miserably.

A little background…

The 22SS form in Washington State has several VERY IMPORTANT clauses which can allow the seller to continue to accept and submit higher offers to the bank.  The second important clause can allow the buyer to walk at any time and keep their earnest money – watch these carefully (or hire me and I’ll do it for you…).  I’m more concerned about the first clause, if the seller can accept additional higher or better offers and submit them to the bank the buyer runs the risk of not getting the home they offered on and have been waiting a LONG TIME to receive a response.  This was the case on our experiment, too.

Back to the experiment…

We had an offer, and for easy numbers lets say it was for $90,000 on a short sale.  The offer and package was submitted to the bank and we were patiently waiting for the bank to respond.  Several weeks had gone by and now we’ve received another offer from a “got to have it now buyer,” who generously offered $105,000.   Having the ability to accept and submit higher offers, we contacted the bank, swapped the offer and then…

The bank started completely over.

“What the heck!” we thought.  but what are you going to do, they started over, six weeks wasted and we burned an otherwise great buyer who offered at $90,000.. only to start over.   Lesson learned.

In my opinion (and school-of-hard-knocks-experience), it’s best to hold onto the offer that is not necessarily the highest, but the one that is most likely to hang in there for the long term and buy the property despite hoops, tunnels and acrobatics required by the bank to get it done.  Accept the most likely to succeed candidate and put ALL others in backup.  Thinking back to my three simple rules of real estate “Location, Location, and TIMING,” it’s often one of the backup offers who gets snuck in at the last moment (but even then to switch a buyer out in a short sale, we have to re-approve a large portion of the file).

The facts:

1. Shorts sales are anything but short.
2. The banks call the shots, you wait and jump
3. You NEED a great agent to navigate you through (however I firmly agree that MOST aspects are beyond the agents control in the short sale negotiation process, having an agent familiar with the process is like having an experienced captain navigate treacherous waters – your chances of success are far greater).
4. As a buyer, negotiate your ability to walk any time (on the WA 22SS) and keep looking.  There’s no guarantee the bank will approve your short sale offer so keep it as your ace in the hole and keep looking.

Questions?  Sound off in the comments or contact us!  We’re passionate about this.

LAS VEGAS NEVADA, fore example is one of the hardes hit foreclosure and loan default cities in the nation, but some investors are complaining that it’s too hard to secure a deal, and the competition is too fierce to obtain the margins necessary to make a profit.

According to a recent Wall Street Journal article, even investors with cash are finding it hard as many banks receive 20 offers in days on properties – often escalating the prices well above asking price.  Other outside groups are buying blocks of homes, sight-unseen and many investors cannot afford that risk.

Meanwhile, In Spokane Washington…
We’re seeing an increasing amount of inventory for Bank Owned Propeties.  I have made agressive cash offers on dozens, for many of my investor clients.  Most were too agressive for the bank’s liking.  Most, were extreme fixer-upper’s with no room to make the necessary repairs and sell in today’s market for profit.  Four to five years ago, we saw rapid appreciation where one gained value in their home while the grass grew, we’re not so fortunate in today’s market.  To make money on a flip, the property has to be bought right.  The numbers have to work before you buy, or they never will.

No matter how many flashy elements, slabs of granite, travertine tiles or plasma TV’s you put into a home, it’s still worth what it’s worth and if you paid too much, well good luck turning a profit.

What’s my point you ask?

My point is that buying bank owned properties is a numbers game.  You cannot get hung up on the two or three propeties you didn’t get.  Educate yourself on price, needed repairs and your exit strategy.  Make you best offer with those factors in mind, and walk away if you don’t get it.  Try-Fail-Adjust.

In 2008 and 2009, banks would jump for quick-close cash offers.  The quick exit seemed to be a viable strategy for them to get many of these propeties off their books, but it affected the bottom line poorly.  Today, banks are looking at bottom line net AND the strength of the buyer.  Most will counter a 5 day close with a 25-30 day close, and will not rush to close any sooner.   It’s become a timing game.

As a property ages on the MLS, banks strategically drop the price small frations at a time.  Depending on the age of the price redution and the current price, I speculate that most banks have a formula or range that would be an acceptable offer (at least I would if I were in their shoes).  It will take multiple offers on the SAME house over time to get the deal you want. 

Patience Grasshopper

Just as the banks have strategised a plan to yield the highest and best offers possible, you must strategize a plan to get them where you want.  The swing hard make ‘em hurt method hasn’t worked in a while (i.e. $100,000 property and offer $30,000), most times this will get shut down right away.  If your end goal was $70,000 I’ve found it wiser and more efficient to start closer to your goal and hold firm over multiple offers several week’s apart.  Don’t worry if someone comes in and pays $90,000 – you weren’t willing to pay that anyway, let them have it.  Eventually, barring any interest to the contrary, your $70,000 offer will start looking attractive.   The trick is to have multiple irons in the fire and negotiate many deals at once.  And you must have a great agent.

Like me.

To access this layer, simply select the “More” tab in the top right of the maps screen and check the checkbox titled “Real Estate.”   Once selected the layer will populate the maps screen with listings.

Clicking on a listing in the map will allow the user to view the data on the listing and more detailed information.

Example of Listings on Google Maps

Another useful tool provided by Google is their new parcel data included by default on their maps.  The parcels are visible at the closer zoom levels and are synced directly with datasources to provide pretty accurate depictions of parcels.

Parcel View From Google.

For more information or to try these tools out for yourself, visit Google Maps.  A new Google Navigation (Turn By Turn) tool is due to be out soon too, I can’t wait to see how all of these integrate to make our day to day lives easier.

Simply put, most people just have TOO MUCH STUFF in their bedrooms.  Selling your home is a good time to address the 300 pounds of clothing you haven’t worn in years.  Aside from that – a few simple rules to follow:

1. Your closet doors should shut. Nothing looks worse (in pictures and in person) than a closet bursting at the hinges full of stuff.  The doors should shut and when opened one should see floor on the bottom, wall in the back and the ceiling above. 
2. Dress up your bed. Many times I suggest a new comforter (unless the one you have doesn’t look worn and washed.  Clean up your headboard, all loose change, books etc. should be removed.  Think of it this way, your bed should look like the bed you see in a furniture store (they are trying to get you to imagine your stuff on the bed, which is what we’re trying to do as well when selling your home).
3. Open your window. Natural light paints a room more than any other tool you can use.  I’d say over half the homes I sell have their blinds tightly drawn limiting the natural light entering the room.  I do it too, it’s the cave mentality, we want to feel protected and secure in our bedroom; unfortunately it’s not ideal when selling.
4. Make it smell good. Most of the time this means doing the laundry.  Other times it’s a pet bed.  Overall – freshen up the items in the room that hold smells – these are: Bedding, Pillows, Carpet, Dog Beds, Clothing and garbage cans.  A small oil-stick scent can help, but you want to avoid making it look like you’re covering something up.

The bedroom is one of the most important rooms in the home (aside from the kitchen) for a buyer’s decision.  Optimizing this area will help your home sell faster and in many cases for more money.

All it takes is an email (yep – that simple, and I’ll post the information below), you request the CADLOGS for the address and specified date range. They will present you the information which is all the Police Calls in which the specific address appears. You can then review for reports (and pull those seperately) or just know what you’re getting into with a specific tenant or property. Very useful.

[For City of Spokane Only]
To request CADLOGS of your own. You can submit a request to Police Records for that information. Their email address is spdrecordsinforequest@spokanepolice.org Just tell them you are requesting the CADLOGS for the specific address of the residence. You will also need to give them a time frame that you would like the search to cover. CADLOGS will provide you with any calls for service that occurred at that address. Presto! Please note that reports are subject to review, copying fees ($.90 first page/$.30 subsequent pages) and can take up to 90 days to receive in some cases.

Hope everyone is having a great day!

PS> If you have your own method – Please Share!