You have a buyer and their offer is submitted.  The bank has accepted the financials and reviewed the BPOs.  You’re happily waiting for a short sale approval, when out of the blue, the bank drops a bomb in your lap:  They counter with a sales price that is $25,000 more than the offer submitted.  What now?

Agents can find this very discouraging, and with lack of experience as to how to proceed, a counter can often kill the deal.  For the novice short sale agent, the first thought is often, “I’ll never be able to convince the buyer to pay that much more!”  But digging deeper into the buyer’s wallet is not the place to start.  Get ready to go to work; it’s time to prepare for negotiation. 

  • Make sure the price of the initial offer submitted is realistic.  Yes, short sales often do sell somewhat under market value, but the bank is not going to accept a ridiculously low offer.  Save everyone’s time and don’t even bother to submit a seriously low-ball offer unless you’re prepared for a counter.
  • Gather your ammunition.  Check current comps and make sure that your price point falls within range of active and sold listings.  If needed, do an additionalBPO, pointing out items that add or detract from value in all of the comps.  The comp that is most similar should also be closest in price.  Often times, bank BPOs are performed by agents who are from outside the area and might be unaware of certain neighborhood conditions that have a negative impact on value.
  • Make sure you have a list of all items that need repair on the property, or other concerns that might take away from the value.  For example, un-permitted room additions or proximity to a noisy business.
  • Speak with the buyer and the seller.  Before going any further in the negotiation it’s important that you carefully explain the situation to both the seller and the buyer.  Don’t let your seller panic.  Explain the steps you are taking to justify the original price to the bank and keep the buyer on board.  And likewise, make sure your buyer understands the price range of the comps and come to an agreement about how much more they might be willing to pay, if any.

Armed with solid comps, a list of repairs, and some wiggle room to negotiate price, your chances of getting the deal done are great!

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