How many times have I heard these questions? “WHY IS THIS TAKING SO LONG?” “WHY DID THEY WAIT 90 DAYS TO COUNTER THIS?” “WHY DID THE BUYER WALK?” and the most common question “WHY DIDN’T SOMEONE TELL ME THIS AHEAD OF TIME?” My goal is to close deals not generate buyers. That is why I request that all this be disclosed prior to you before writing an offer.
Before SUBMITTING offer, use this checklist to better prepare your Buyer’s offer for acceptance. Offers will not be submitted for review until I have received all items.
ü Offers must be written on the most current CAR residential purchase contract.
ü Please make sure all documents are legible and signed. Please use dark ink for signatures, as they are sometimes too faint for see after many copy generations.
ü Pre-approval letter from lender must be attached.
ü Proof of funds to close must be attached. (Pre-approval letter is not Proof of Funds. Examples of POF: Copy of the saving account showing the funds, bank statement or letter from bank verifying deposits etc…) All account numbers can be blacked out for privacy.
ü Require that earnest deposit be a minimum of 1%
ü Copy of earnest deposit check must be attached. (Buyer keeps it)
ü Page 8 -- Agent must sign the offer and include their license number and the office license number. Please fill in everything, don’t leave stuff blank.
ü Section 11 – In section B, "Addenda", please check box for "Short Sale Addendum" and "Other". In "Other"
ü Your buyer will give me a minimum of 90 days to negotiate the short-sale. If at the end of 90 days I still does not have an approval, your buyer will have the option of walking or continuing to wait for the banks approval. (The deposit and contingency period are handled on the Short-Sale Addendum (SSA)).
ü CAR Short Sale Addendum (SSA) must be attached and needs to be incorporated into the agreement filled out per these guidelines.
Guidelines: The C.A.R. form "Short Sale Addendum" (SSA).
Paragraph A ?] Date is 90 days from the day you create the offer.
Paragraph B.1. – Check Box ?] Time periods (ii) shall begin the Day After Seller delivers to Buyer written notice of Short?]Sale lender's consent.
Paragraph B.2. – Don’t Check Box ?] Deposit check shall be (i) immediately handled as provided in the Agreement. (Call me for alternative)
ü Please do not write “split 50/50” Please write “each to pay their own fees as customary” (call me I can explain)
ü If asking for closing costs, they cannot exceed 3% and may be countered out.
ü No FHA or VA loans will be considered. No down payment assistance programs will be considered.
ü All facts known to the agent (prior to Seller acceptance date) materially affecting the desirability are shared before escrow has started. I send the Buyer’s agent a disclosure package within 7 days. Buyer will sign-off on those disclosures even though there may not be approval for the short sale.
ü The lenders or sellers will not pay for a home warranty, so please do not include it in the contract.
ü Unless otherwise noted in the listing remarks, the lender will not pay for a termite report or repairs, so please do not include it in the contract. Your client is welcome to have their own inspection completed at any time. (The price of the property is already reduced to compensate the buyer for this)
ü The transaction is an “As-Is” purchase (The price of the property is already reduced to compensate the buyer for this)
ü Once an approval is given, you will be required to close escrow in 30 days or less.
ADDENDNUM verbiage must be part of the contract.
1. Property is sold As-Is
2. All contingencies to be removed 17 days after seller's approval and buyer's receipt of lien holder(s) written short sale approval. Contingency removal method to be passive (does not require signatures).
3. Contract and short sale is conditional upon:
(a.) Seller's receipt and approval of lien holder(s) short sale approval and conditions.
(b.) Seller's Lien holders' release and waiver of any future deficiency rights and forgiveness of the shortfall resulting from the sale of the subject property.
4. By accepting and approving this offer to purchase from the buyer(s), the lender(s), lien holder(s) and investor(s) agree to take no action to recover any deficiency caused by discounting or forgiveness of debt, and full re-conveyance of existing trust deed(s). The lender(s), lien holder(s) and investor(s) agree to release any rights to pursue a deficiency. This agreement effectively extinguishes the debt between seller(s) and lender(s), lien holder(s) and investor(s).
“Low-Ball offers”= Do not bother to send them. Problem that arises with this type of offer is the Lenders complete a BPO or an appraisal on the property and know what the current market value of the property is. In most cases they will not approve the “low ball” offer that was submitted. If it is not approved, the Buyer simply moves on to the next property, however the Seller may not have enough time to obtain another offer before the last stage of foreclosure can be stopped where its = SOLD AT AUCTION. Some Buyers write numerous Short-Sale offers and when 1 gets approved, they will be thrilled. However, the clock kept ticking to whole time for the Seller. That “low-ball” offer just wasted precious time the Seller did not have.
All of the negotiations are handled by me, not a processor or outside third party. Each short sale is different and you need to appreciate that the person handling yours has experience in dealing with the banks. I now negotiate for other agents.
