In the second part of our series on getting the perfect home in a short sale transaction, we will discuss the negotiation process. Based on your solid preparation, you are ready to make an offer on the home of your choice. Remember, though, that a true negotiation is a give and take process. Here’s what we mean.
The goal of this whole negotiation, from your point of view, is to get the best price possible. Preferably, your goal will be to get the short sale property below its “fair market value.” On the other side of this negotiation sits the seller who has to move a piece of property in order to pay back the lender. Typically, short sale sellers realize they will be taking a price that is less than what is owed on the property, as overall devaluation of property has caused this reality. So, the new goal is to try to get at least the new fair market value of the property.
So, as you can see, getting the perfect short sale home will involve some give and take. Typically, your first offer will be very low. The seller’s counter offer will be too high. From here, the winner of the negotiation will be the one who makes the best case for establishing what the “true fair market value” of the property really is.
This is where your Realtor will come into play. By using tools like comparison sales, independent appraisals, and Broker Price Opinions, your Realtor will help you make the case that your particular property is not “typical” of similar homes that have sold in the area. They can help you establish a case for the need of repairs for the property, especially if those repairs help to bring a property up to code for the area. The bank will always assume the position that the house is fit for sale “as is,” and that the property is worth the fair market value they have established. The proverbial “burden of proof” will be on you and your Realtor. Realistically, though, you should be able to make a good case, in most circumstances, for a 15 percent discount on the fair market value. You might even be able to negotiate even more of a discount if the property has set for a while. Patience may work on your side.
Getting the perfect short sale home will involve being able to show a case for the devaluation of the home’s price. It will also involve taking control of the real moving target in this deal: the fair market value. Getting a good Charlotte Realtor that has a winning record in this type of short sale negotiation could pay off handsomely.