When banks agree to list a home under Venice short sales, they are already taking a loss on the debt owed to them. That doesn’t mean that banks aren’t savvy. Banks have ways that help them to make up some of the cost on Venice short sales so that the deal won’t be a total bust.
One of the first things they do with Venice short sales is to negotiate the agent’s commission. Many agents that specialize in Venice short sales understand that many times the bank will only grant approval if the agent agrees to take a cut in commission. It is one reason why many agents steer clients away from Venice short sales-it affects their commission.
Another way that banks cut costs on short sales is to offer the home “as is.” That means that they will not agree to pay any of the repair costs requested by the buyers. They are simply trying to get rid of the house without losing more money than they have to.
The bank will also cut corners with inspections. Instead of conducting a thorough inspection, they choose to get a Broker Price Opinion (BPO). It costs less and it leaves out a lot of the normal home inspections for homes that aren’t Venice short sales. Some inspections that aren’t included in the listing are pest infestation inspections, roof inspections, and sewer inspections.
Finally, with Venice short sales the bank will also forego any home warranty. Offering any kind of warranty could leave the bank paying for extensive repairs that would only put them deeper in the whole.
What can buyers learn from this? You have to understand that with Venice short sales there is a good deal to be had, but expecting any kind of repairs or warranty from the bank is normally not feasible.