Today’s Risk in a Sacramento Short Sale
This fact seemed to come as a shock to a buyer’s agent the other day, but home buyers who are buying a short sale in Sacramento and waiting for short sale approval don’t get Brownie points for acting like a buyer. Buuuut my buyer waited, and he put his money in escrow, and that should count for something, the agent lamented. The agent was upset because the bank updated its BPO and now wanted more money. Sorry, behaving like a home buyer doesn’t earn anybody special favors.
Besides, that’s the risk of a short sale. With rising homes prices in Sacramento this spring, it’s even more of a risk as we move into summer. There is no guarantee that the price a buyer enters escrow with will be the same price a buyer will close escrow at. In fact, with the way some agents price short sales in Sacramento, there is no guarantee that the bank will even take that price. Unless there are extenuating circumstances, short sales ought to be priced in line with the comparable sales or where the comparable sales will rise, not below the comps.
I had explained to the agent when we received the counter offer that there are no renegotiations with this particular investor. There rarely is negotiation because the banks write the rules; and I’ve sold hundreds of short sales over the past 9 years — I’ve learned a thing or two from my closed short sales. It eats up more time to run around in circles with the bank, escalate the price issues and then be informed that the price is firm, like it was in the first place, than it does to replace the buyer. I’ve been working on this particular short sale for 9 months as buyer after buyer bailed as we watched BPOs bounce around. The buyer’s agent, however, still expected negotiations and didn’t appreciate the fact when I pointed out my advice seemed to have landed on deaf ears.
Sometimes I feel like I’m talking to a wall when I warn: no renegotiations. I’ve been to hell and back with this investor. It’s best to just give the investor what that particular investor demands and then close the deal. If that means issuing a Notice to the Buyer to Perform to sign an addendum increasing the price, then that’s what we do because we work for the seller. We treat all parties fairly, but my loyalty, as long as it’s not dual agency, lies with the seller.
If the buyer refuses to meet the investor’s demands, then the seller will find a buyer who will. Because those buyers are there.
I’ll tell you this, if you’re in a short sale situation right now as a buyer, thank your lucky stars if you get approval at the price you offered. I just closed another Elk Grove short sale this week that had dragged on since last fall. It was priced way below today’s prices. The bank did not increase the price. This lucky buyer was buying a home in Elk Grove at September 2012 prices. Which means when the vacant home was vandalized, and the buyer demanded a reduction, we chuckled. Hey, go out and see what you can buy at this price today. Nothing? Right! Now, let’s get this closed and stop whining about it.