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We are doing our part to end Short Sales! Are you?

By Jaret Ghent

Real Estate Broker/Owner with Vision Real Estate

May 07, 2009 05:45 PM

As experts, adviser's and educators in the foreclosure market we have decided not to represent Sellers or Buyers in any further Short Sale transactions. Like you... I imagine, we are tired of the banks BS! The excuses, games and complete lack of any system for handling Short Sales.

So here is how we are ridding ourselves and the market in our communities of even more Short Sales. We do not list them any longer, we do not show them to Buyers! Now wait before you fire off your... you do what comment!

If we receive a call about a Short Seller needing an experienced agent to help them we refer it to another qualified agent. That is if they still wish to consider a Short Sale after we educate them of the process and the implications.

With Buyers it is a simple approach... we educate them about the Short Sale process. It goes something like this... Mr. and Mrs Buyer did you know:

less than 1% of Short Sales nationwide ever successfully close.
that it could take 90 days to 6 months or more to close on a Short Sale.
the enticing asking price is at best an educated guess, the bank will decide what they want for the home.
there are many other homes that are priced just as well, without the HASSLE!

After the education we provide our Buyers, backed by statistics and homes that are comparable that are not Short Sales they typically do there part as well and say:

"I think we will pass on BUYING a Short Sale!" If they still think they want to pursue a Short Sale then we refer them as well to another qualified professional!

Now do your part to rid your community of Short Sales and help stop the decline in home values... STOP SELLING THEM!

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Julianna Hind

Keller Williams Realty - Kent, WA

ooooh! sticky subject! There are two sides to this of course! The best part about your business, is that you get to define how it works! Short Sales are a necessary "sanction" I think in the market adjustments. After all, the homes will eventually go to foreclosure. I think Short Sales wreak less havoc on a neighborhood, I applaud your emphasis on education... that is so important! And I think your efforts to refer to specialists are commendable!

May 07, 2009 05:55 PM

Eve Friske

Keller Williams Realty - Rancho Santa Margarita, CA

CDPE, e-PRO, QSC, M.A.

I believe it is up to each individual agent to decide to sell or not sell a short sale listing and you have made that decision.

However, I feel it is important to help those sellers that need our assistance to avoid foreclosure. I do not think that if we avoid selling them or listing them that it will help our communities. In fact, if they do not sell the foreclosure price most often hurts the community. What I feel needs to be done is fair pricing for a short sale listing. The low low bottom basement pricing to generate 10, 20, 30 offers needs to stop and educated value pricing needs to be enforced.

Thank you for referring out your clients to agents that are willing and who hopefully are qualified to help those sellers and buyers get through the short-sale process.

May 07, 2009 06:47 PM

Fernando Herboso - Associate Broker MD, & VA

Maxus Realty Group of Samson Properties - Clarksburg, MD

301-246-0001 Serving Maryland, DC and Northern VA

Having 30 short sales listings and numbers above the 1% statistic , I have to differ. .

Short sales arent happening simply because most Realtors do not have a clue how to do them.

In general 90% of all the real estate business are done by 10 % of Realtors. . I can bet that not one of them will simply dispel short sales because amateurs are failing at it.

Every short sale we close is one less foreclosure in my State. . . .and we feel very proud of that!

May 07, 2009 07:50 PM

Lenn Harley

Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA

Real Estate Broker - Virginia & Maryland

Sadly, I believe that the information you're using to steer home buyers away from short sales is fictional, not factual.

Agents and/or brokers who invent statistics to steer consumers put themselves at risk of lawsuits and board complaints from buyers who, in the future, may recognize "lost opportunity" and seek damages.

We may not like short sale transactions, but we recognize the value to our buyers if, through careful counselling, they wish to include these opportunistic listings in their search.

Further, the claim that there are "there are many other homes that are priced just as well, without the HASSLE!" is not true in most areas. A large percentage of home owner sales are not competitively priced because the owners/sellers have negative equity and can't compete with short sale pricing.

May 07, 2009 10:24 PM

Jaret Ghent

Vision Real Estate - Roseville, CA

Expert Real Estate Advice

Good Morning,

Julianna,

That's right!!! It is sticky and agent education is key! Thanks for your comment.

Eve,

Your right!! I'm not required to show or sell anything... I will explain shortly. I do differ with your opinion that REO prices hurt the community more than a Short Sale. Short Sales provide false market pricing. As many Short Sales never sell and the pricing by the quote "experts" is usually wrong... ie: to low one of the main reasons they never close.

Then the other sellers think they must compete with them, ultimately driving the home values down based on active prices... not SOLD!

Fernando,

Your exactly right when you say "most agents are clueless with Short Sales". Ironically, everyone's a quote "Short Sale Expert" because of one successful short sale transaction, something they read on Activerain or elsewhere. It sounds as if you do understand them as I do, I just choose not to work them any longer.

Lenn,

Hugh... "steering buyers away from short sales", that is a big statement. You need to reread the post and become educated on the term "steering"

"Steering" definition; "The illegal practice of channeling homeseekers to particular areas or neighborhoods. When another person, such as a license, does this, the act has the effect of limiting a homeseeker' choices by restricting the person's ability to choose the neighborhood in which she or he will live."

Not sure when you have closed your last short sale, but they are not a value when you truly understand them. Investor groups today want market value for a short sale - 5% (max)... typically!

How do they arrive at that price "today" they do a complete interior and exterior appraisal, no more BPO's by more incompetent agents in need of the $75 dollars in additional revenue to pay their bills. Or maybe they are just trying to capture the listing when it goes to foreclosure... so give the bank a high price, because the Broker doing the BPO is not on the hook for anything... key term "OPINION". That is why most banks do not use them any longer... among other reasons.

Here is a little more free advise, if you put your buyers in a short sale that takes more than 90 days to close in a declining market is the home worth what they first offered? NO!!

I would be happy to email you a few short sales in our MLS and let you compare them to the REO prices and the non-distressed listings as well. In most markets throughout the country you are only upside down if you purchased in the last 3 - 4 years.

Most informed and educated buyers will not see the value in a short sale in today's market.

jlg

May 08, 2009 03:01 AM

Lenn Harley

Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA

Real Estate Broker - Virginia & Maryland

The word "steer" has uses other than real estate, such as to guide, direct the course of or maneuver.

When short sales are appraising at 10-25% more than contract, they are a good buy.

When short sales and foreclosures are 75% of homes in a location/price range, they should be included.

We close a lot of short sales. In fact, under $500K, short sales and foreclosures ARE our market. The remainder of the listings are home owner listed properties that are priced to cover the negative equity and would never appraise.

Short sales and foreclosures are included in appraisals here.

It's possible that your area didn't experience the BOOM that ours did. Many homes were sold in the 2004-2006 years and these owners are upside down even if they put 20-30% down. Our prices are back to 2004 prices and owners that purchased after that time, are so upside down, they cannot sell. Even if they got a contract for their price, it wouldn't appraise.

That's my market. We close 17 short sales in the past quarter.

May 08, 2009 04:25 AM