Summary: SSP013: Short Sale Help for Agents: Selecting the Best Buyer Part 3 During this episode you will learn which types of buyer financing are most favorable when it comes to getting your Short Sales approved by the seller's lien holder. (Read the Unedited Word-for-Word Audio Transcript Below) ______________________________________________________________ Follow this link to Subscribe to my Short Sale Podcast in iTunes -- CLICK HERE ______________________________________________________________ Let me know your thoughts by commenting below... Thanks for Listening and Happy Learning - Scot The Unedited Word-for-Word Audio Transcription: Episode number 13 of the Short Sale Podcast; "Short Sale Help for Agents: Selecting the Best Buyer Part3". This is Scot Kenkel. In the last episode we left off with three of the most common landmines, the inspection, the appraisal, and then seller paid concessions, all of this, of course, intended to help go from sold to closed, as opposed to sold to cancel. Our final number four, landmine, and one of the most often misunderstood, has to do with financing of the deal. Understand this about what we're looking for in a buyer, there are three characteristics or components. #1 We want a buyer that is getting a good enough deal that they'll do what we tell them to do. #2 We want a buyer that knows exactly what they're getting into and willing to spend money to make sure. #3 We want a buyer that has a degree of financial flexibility. We've already gone over how the value of your buyer feeling that they're getting a good deal, how important that is, and that they know what they're getting into and willing to pay to find out. But what does financial flexibility really mean? It means that your buyer has the necessary resources, as well as willingness, to be able to come up with a little more cash than they expected without choking. Now I'm not saying that they're going to go from paying $100,000 to paying $120,000. What I am saying, though, if your buyer, the one that wrote the offer of $100,000, remember it's worth $150,000 if it was in tip-top condition, you listed it wholesale at $108,000, and they wrote an offer of $100,000. Now, if they came back to you and said, "Well, we don't have the money to do an inspection, don't have the money to do an inspection, don't have the money to pay to have an inspection done." My recommendation is it would almost be a crime for you to continue with this buyer. Why? If they can't come up with the money to do an inspection, then they are probably going to have a hard time coming up with the money. The best thing you can do is find a new buyer. No hard feelings. There's a difference between them not being able to come up with the money and them not being willing to come up with the money. There's a huge difference there. If they are not able to, that's different. Likewise, how the buyer plans to finance the purchase is really another entire landmine. Let's say that they agree to the $100,000. But in order for them to purchase it they're going to borrow money. Not just any money, but a federally guaranteed loan, an FHA loan, because they don't have any money available. What's wrong with this? Well, try to keep in mind that it is a short sale and it's a house being bought in as-is condition. Do you really want to bet the next three months of your life on whether or not this buyer is going to be able to close the deal? Especially when they demand upfront that the seller pay their closing costs and cover their down payment? This is the opposite of financial flexibility. That doesn't mean that you can't work a deal out with a buyer who wants to get an FHA loan, but my advice to you is this. There's a huge difference between having no money and not wanting to use the money they have. Having no money, landmine. Avoid them. Discover it quick. Find a new buyer. Choosing not to use their money, that's OK. We all do it.
