When I initially spoke to the seller on the phone, I had suggested that she might want to move back into her home prior to initiating the short sale so we could try to qualify her for a HAFA short sale, which pays $10,000 to the seller, but that proved to be impossible once I saw the condition of the fixer home in Sacramento. My office assistant called me after entering my description of the home into MLS. Laughing, that he had never heard a Sacramento Realtor describe the home in such “honest terms.”
The description was partly for the amusement of other agents but primarily for the short sale lender. The bank tends to read the marketing comments. Plus, I’m sorta tired of agents complaining that I didn’t clearly explain the condition when I say, for example, “the bathroom is gutted.” What does that mean to them? I don’t know. The basic problem with selling a fixer home in Sacramento as a short sale is the BPO agents often just do a drive by. They don’t even look at the interior of the property because that’s too much work, evidently, for the crummy $50 the bank pays, or whatever the pittance is for a BPO. Further, even if they managed to inspect the interior, the type of agents who rely on BPO wages to support their lifestyle can’t estimate the cost to replace a roof much less the reasonable cost to adequately repair a fixer home in Sacramento.
On top of which, sometimes the investor for the loan the bank is servicing has its own minimum net guidelines, which has little to do with the actual value. Selling a fixer home in Sacramento as a short sale is a struggle all around, primarily for the Sacramento short sale agent who is pushing for an approval. Throw into the mix the abundance of lowball offers from other buyers, guided by agents who also can’t estimate repair costs in the other direction. Agents call and beg to be in back-up position on these properties and why? Why, when it will immediately sell upon fall-out to some other eager investor and, at that time, at an approved price?
When a home is truly destroyed, selling a fixer home in Sacramento as a short sale is a piece of cake to get an offer, even though it may be a struggle to close. However, when a Sacramento Realtor is selling a fixer home that is not trashed from end to end, it’s less clear how much it may cost to repair. Those homes might require rehabs more for cosmetic purposes than physical damage. This is when we often advise the seller to require the buyer to submit at least a couple of licensed contractor estimates that bridge the gap between the market value the bank will expect and its true value based on condition.
I then submit a revised CMA with the licensed contractor estimates, close-up photographs and, voila, the bank now has tangible evidence to reduce the price. To do anything else means you’re just pounding your head into the ground and hoping it will feel so good when you stop.