Los Angeles Short sales and REO's - Don't assume the bank won't pay for anything

I have buyers interested in looking at a particular home that is listed as a short sale. In their price range, this is not at all unexpected.  I have explained the process to them and they realize that banks are not into making repairs or losing any more money on a sale than necessary.  At the same time, they are first time buyers with limit funds and they need a clear idea of the costs involved in any potential purchase. The listing of the house in question has agent remarks indicating that the "bank will not pay for termite or city occupancy requirements" and that the "buyer is to waive these requirements."  Why would a listing agent make such an assumption? I am not new to short sales and REO's and have successfully closed a number of such transactions.  What I don't understand is why so many listing agents make the blanket statement that "the bank won't pay for anything" and the property is being sold "strict as-is". In my experience, this has not necessarily been the case. If you have a short sale listing, don't throw up road blocks and obstacles before you even get an offer. You want to get your client out from under the house and sell it as quickly and easily as possible.  In this neighborhood, termite and city occupancy issues are almost always paid for by the seller.  Of course it's possible that the bank will refuse to pay for them, but at least ASK!   Before telling prospective buyers that the bank won't pay for this or that at least find out what costs are involved. Have the property inspected for termites and city occupancy issues and find out what work needs to be done and what the associated costs will be. You can go even further and get repair estimates for any issues the seller is aware.  Put EVERYTHING on the HUD-1 that you give the bank.  If presented correctly, there is a good chance that the bank will cover many if not all of these items.  Even if they won't, you've at least given your prospective buyers a clearer picture of the potential costs they may incur and run less risk of the deal falling apart later due to unforeseen issues. Buyers- talk to me about the best way to structure your offer. Finding out what the listing agent's process is for handling short sales will go a long way to getting one accepted. Jenny Durling signature Jenny Durling Broker Associate L.A. Property Solutions 213-215-4758 http://www.LApropertySolutions.com

Discussion

#1 By Earnestine Calnick at 3/14/2010 7:53 PM

There is obviously much more to look up about this. I think you made some o.k points in Features also. Keep working ,fantasitc writeup!

#2 By Perfume For Women at 3/17/2010 -2:10 PM

Morning

I have a different idea on this and I really wished I had the time right now. I'll go right now and subscribe and when I have a chance I'll leave a reply. Great blog by the way. I'm trying to get one going but my programming friend is slacking off on me. Many thanks for your post - Joy.

See You!

#3 By Jenny Durling at 3/17/2010 0:21 PM

Hi Joy- feel free to come back and comment when you have time. I'm always game for another opinion.

#4 By Agnes Beaudoin at 3/19/2010 7:08 AM

Interesting blog you got here but I can't seem to find the RSS button.

#5 By Jenny Durling at 3/25/2010 6:27 AM

I have added a way for you to subscribe by both RSS and email. It's in the right navigation bar of every page.

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