St George Short Sale Letter
The below is a short sale letter response, I emailed a buyer. I was helping assess a back up offer situation for them. It will underscore the dynamics that force bettering the position of the seller, but not yours in the amount of unproductive time you can expend. You may also assess the importance of your agent doing some reconnaissance work for you.
OK realize this OK... that they ALL will want to say, sure bring a back up offer. What I try to do is assess whether or not it really looks to have a chance on it or not, for you. In other words, is there anything convincing they can tell us that leads them to believe it could fall out. Now, if a listing does fall out [and this agent does a lot of short sales], AND they do not have that one in ten chances it can fall out, back up offer in place, they have to "round up" another offer quick OR it starts all over at the start of the waiting game and they can completely lose the listing from the Seller. This one is out in Virgin, so you can understand the likelihood of them reeling us in "on a line", meaning not with truthful info, is plausible. Just to let you know how "geared/rigged" this is, I'll tell you exactly what happened that is conflicting information. The first call was that they are doing the BPO/Appraisal and so it is a good time to put a back up offer "because" and this is where I got "a bit of a tall tale" in my estimations... "because" the first offer is an investor and they were a lower offer and the second offer is a lower offer too. Yet, in doing some thinking, I realized that I could not match the info she gave me with whether or not she is basing the 'lower offers off "if" the appraisal is coming in higher "scenario/hypothetical" is truthful or not' based on me knowing or unless I ask explicitly, "So has the appraisal actually come in yet?".
There is a tension for me not asking, because they are not supposed to tell and often plead the actual truth that most times, they do not get to know what the appraisal came in at, just the bank knows. I called back to find out IF the appraisal had already been done or not, as a basis..., if it had, that if they do already know it is coming in higher or not, than the others. Also, then we might be able to separate ourselves from the competition enough, to negotiate down a little or just knowing is power. Anyway... so I get a different gal right, who is in this happy mood, not the cautious, "what if" the most unlikely thing happened and our Virgin listing "fell out of bed" thinking and so when I asked her regarding so I heard that the BPO was being done on it, and has it been done yet. She reported oh ya, that it has and the appraiser let them know to not worry because the value has come in good on it. I pressed to know what that meant by leading her to say, 'you mean that it has come in low enough and close enough to your existing offers, that you are not going to have to worry' and she confirmed that information straight with me and double again when I asked that the backup offer is sitting realistic as well and YES, UNLIKE the other gal had told me, completely different story line altogether! The first call was "with the gal", the more 'front line' person responsible to "have that unlikely scenario planned and lined up for", by sending us off to hopefully go see it, using up all our time traveling out there and spending lots of time, having us all the while be thinking of greater and more likely chances on it, than ever really were. Make sense? Now I tell you this only to help. It does not mean anything to me. In other words, I'm still open minded that "if" these gals think there might be a chance the bank, as I did ask if the bank has responded with the info/appraisal knowledge yet, to the offers, whether they will just "Accept" the offer they have or not, that if they still think there is a hair of a chance, I'm open to be doing things on a timeline of our making to be putting several back up offers across many of these in hopes that one does happen to "fall-out" that we'd be sitting pretty.
Just so you know though, that just because the possibility does exist that the offers are bit ("little") low on this one, supposedly, does not mean that the listing agents primary goal is to heighten best price WHEN they are also bound more so to honor the first offer and if the appraisal is being met, to not disturb the pot by putting forth knowledge to the bank that there is a higher offer. I believe, that 9 times out of 10, most agents DO NOT disturb the pot and let the bank know about the higher offer, UNTIL it would be necessary. Why? It has the bank go through a whole new submission for approval process and puts the short sale BACK about one to two months in its progress to being a done deal and closed transaction. Remember, the agent works for the seller, not the bank and the seller wants to move on and so do the agents. They get paid either way. They are not Mavericks, but do get it closed at appraisal guarded prices, not above that. I know this sounds crazy, it is just how it works. I am being honest that I believe that 9 times out of 10, when there is belief that the appraisal just might be OK, they will not apprise the bank of a higher back up offer. Besides think of it this way, the first offer they've already submitted and committed to in writing- they do not renege on that contract, but only based off of the banks approval or non-approval of current price. All these factors help explain why jumping on an email update to be the first offer on a short sale is powerful; heck one can always back out, and most often there has been no earnest money put up.
Brian Makes Recommendations
On this above property, I recommend we call back in two days to see how the bank is responding to the first offer based off the appraisal. If we catch it in a pattern of it being countered by the bank, we could judge it then off of the current info. It is an option that we come in then, with a back up offer hopefully armed with some info about "how far apart" they are. But be aware, if they are just stringing us along as a leverage tool to get that one that is already 'in the bag' to come up BECAUSE they've now heard of someone who is going to 'get into things', and this is where the listing agents use that to say "if you don't come up to the banks price" we think they/know, the other party will. Now, they typically string us along just enough to know what we'd be willing to do, just in case, that it would be better than what they could have gotten out of the other party, before they'd disenfranchise and lose them. They HOLD ONTO THEM and give them preferential treatment and USE YOU to get them up. This is why I recommend reconnaissance from a distance, to find out if negotiations are failing... then we can make our move. They will bluff that they are, but I would ask them to call us when they do, that we do not want to be caught in the bidding war, then we'd go look at it and see. This way, they can't count on you and the merits of them telling the other side false information and having the first party walk on them are far less likely to happen, that you served the purpose of getting the first party to come up. Better to wait for them to "fall out" and then come in and go at if for 'your getting price' as well or even to have a BETTER chance at getting it EVEN IF you were willing to go at the banks price. Am I making sense? I have just been "free write" ing this and I would rather give you some things to think about, than flying blind. I represent YOU, which means educating you on the intricacies of negotiation positioning for your best interests.As you can see, this is just a small cross section of what I will hear back from agents. You need to realize too, that it is the technique your agent uses to 'get at the truth' that could save you an immense amount of time. It is also vital to help position you properly on negotiations. I find that most other agents I speak with on their short sales are a bit more transparent than this above example, so don't worry. I use the above example to underscore the importance of how you can get lied to. However, I find that a straight shooting approach tends to get at the truth. I hope you can also see that I also can look around the bush if I smell something, and in showing the ability to turn to tactics and tenacity, often leading or putting the other side on the spot. People do not normally appeal to lying if they are hit straight with things that relate to the overall situation. I tend to ask a lot of questions, which gives us what we need. If you need to talk about your situation and need something, like to get on email udpates or anything, call me now at: (435) 674-3600. I'm Brian.