We've seen lots of Jacksonville short sale offers on our listings. Some are written up by agents who clearly know what they are dealing with in regards to short sales. These offers have the correct terms and are for a price that a bank should reasonably accept. Other offers are downright ridiculous. Some are just silly in their pricing. Many are ridiculous with their terms, wanting to lock the seller in while their buyer has the right to go put in offers all over town. While the buyer is sitting at the closing table on a different home, the sellers think that they have a buyer for theirs. This should not be happening, but it happens every day in Jacksonville short sales. It all goes back to the contract terms.
A recent short sale offer we received beat them all. Here were the terms with a discussion about why this is a bad offer for a Jacksonville short sale seller.
Binder deposit due within 1 day of lienholders written approval. The buyer has absolutely no incentive to ever perform on the contract. Binder deposits should be due at the time of the contract. While the house is locked up for the buyer, and other potential buyers who may be serious are not seeing the home, the seller is barreling towards foreclosure. Do not think for one second that a buyer who has nothing in the game is not willing to go buy a different home while waiting for the approval from the bank.
Repairs and replacements allowance written in and WDO paragraph left intact. Sellers who are in Jacksonville short sale situations are clearly in them for a reason. They are usually totally out of money. Short sales are usually bargain priced. With that buyers should not expect to be able to demand repairs. If they had the money to do all of that, they would usually have the money to make a payment. This particular offer would have put the sellers on the hook for over $4,000 in repairs. This is not a reasonable expectation for a buyer to have.
"Buyer reserves the right to withdraw this offer at anytime prior to receiving written notice that the agreement has been approved by the encumbrance holder(s)." This is what we lovingly refer to as a "wiggle clause." Why would a seller ever agree to be locked into a contract when the buyer is not? If you are submitting an offer on a Jacksonville short sale that we have listed, don't even try this one. If the short sale buyer is not willing to be locked in, the seller should not be locked in either.
"Authorization form for Buyer's agent to be part of Purchase and Sale Agreement" Depending on the circumstances sometimes this is reasonable, sometimes this is not. This is not reasonable or necessary if the listing agent is a Jacksonville short sale specialist who knows how to work a Jacksonville short sale transaction. When this is the case, this provision can only hurt. You do not harass or tick off the negotiator at the bank. You have to know how to handle the negotiator in the loss mitigation department. In cases where the listing agent clearly does not know how to work a short sale and the buyer's agent does, this is reasonable and probably even necessary. If the listing agent knows what they are doing in a short sale transaction, this can ONLY hurt.
Closing to take place at buyer agent's favorite title company. Most short sales being worked correctly already have an open file at a title company. This is the title company that should be closing the transaction. They have many times already run title and checked for liens.
"...any future offers or contracts submitted during the timeframe of this agreement will be negotiated as backup offers to this agreement until the expiration date on the agreement or until both parties agree to release the agreement whichever comes first. Under no circumstances shall Seller submit the backup contract(s) to the encumbrance holder(s) until this agreement is terminated or rejected by the encumbrance holder(s)." Any future offers SHOULD BE negotiated as backup offers to the first agreement if the first agreement is still in effect. However, the mandate to never submit the backup contract to the bank is unreasonable and it is not in the best interest of the seller to agree to this term. Many times a seller will not want to submit the backup offer, however, they should always have the right to do so. Our Jacksonville short sale sellers do not agree to this term. See notes below.
Paragraph 9 of the Short Sale/Preforeclosure Addendum is deleted. This is the paragraph that allows the seller to negotiate backup offers and submit the backup(s) to the lender at their discretion. Imagine this scenario. A seller submits an offer that is on the low end of what should be acceptable to the lender. The lender is asking the seller to sign a note for the difference between what is owed and what the lender will recover on the sale. A new offer comes in reducing that deficiency by $20,000. This is clearly a situation where you would want to submit the backup contract to the lender. Why would a seller agree to delete a paragraph that would allow them to reduce a deficiency amount? Answer: They wouldn't...or at least they SHOULDN'T.
If you are a thinking about selling your Jacksonville real estate in a short sale situation, be sure you are working with a Jacksonville short sale specialist. You need someone who understands the way a short sale works and what to look out for when that offer comes in. If you are a buyer looking to purchase a Jacksonville short sale expect to have a reasonable contract, not a contract that is so lopsided that you are the only one with any benefits. Remember that a seller is headed towards foreclosure, do you really want to tie up their property when you are not committed to purchasing it? If you buy a different house instead, you may be putting a seller in a situation where they have no time left to find a new buyer before their foreclosure.
