How Can I Get Multiple Offers on My Short Sale?

Question: How Can I Get Multiple Offers on My Short Sale?

A reader asks: "I am thinking about putting my home on the market as a short sale, but I have reservations about paying taxes to the state on the deficit. It would make sense to get as high of a price for the house as I can. I hear some short sales are getting 2 or 3 offers. How can I get multiple offers on my short sale?"

Answer: Excellent question. For one thing, you most likely see multiple offers happening on bank-owned homes, so it's not out of the question to market your short sale home in the same way in hopes of attracting multiple offers.

Multiple Offers on a Short Sale Happen for Two Reasons

Pricing a short sale is a mix of blending intuition, strategy and math. Price it wrong, and you won't get any offers. Here are the two reasons why buyers go into a bidding frenzy over a short sale home, or any home, for that matter:

• The Short Sale Price is Below Comparable Sales

  Nobody can resist a good deal. Buyers who are home shopping by focusing on a certain neighborhood get to know the prices in that neighborhood very quickly. They can spot an under market deal before some agents will.

• The Short Sale Home is Irresistible

  If your home is highly desirable due to location, construction, condition or, lucky you, all three, everybody will want to buy it. Unique homes are hard to come by. If you have a special home, you most likely know it.

Short Sale Listing Mistakes

Almost every one of my short sale listings in Sacramento get multiple offers, sometimes a dozen or more. Other agents lament that their short sales take too long to sell because few buyer's agents want to make offers on a short sale. My secret? I looked at what other agents did wrong, and then I don't do that. Here are some of their mistakes:

• Priced too high or way too low.

• No multiple photographs or, worse, a really lousy photograph.

• No inducement for a buyer's agent to write an offer.

• Bad property description / marketing comments.

• Agent doesn't project confidence that the deal will close.

• No evidence that the short sale package is complete.

• Leaves the buyer's agent wondering if the listing agent is competent or has short sale experience.

• Restricted hours on showings.

• Makes the offer process sound too confusing.

How to Make Buyers Fight For Your Short Sale Home

First, you should stage the home. Clean out the clutter. Make it attractive to buyers, and have it ready to go the minute your home hits the market.

• Ask your agent to submit all offers to the bank and put in the listing "no lowball offers."

• After the first offer is received, let the second buyer who calls know that you have received an offer but there is still time to submit a second offer to the bank. Repeat with subsequent buyers.

• Ask your agent to check in with all buyers during the short sale waiting period (while negotiating the short sale with the bank). Give those buyers weekly updates.

• Don't disclose any of your offer prices. If you do, your agent will need to notify all the other buyers of those prices, and some will drop out.

• Don't discard any offer because you have a higher offer. You have no way of knowing whether the buyer with the higher offer will still be in the game upon short sale approval.

_{At the time of writing, Elizabeth Weintraub, DRE # 00697006, is a Broker-Associate at Lyon Real Estate in Sacramento, California.}