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Short sales are like a box of chocolates...

By
Real Estate Agent with Long Realty West Valley AZ RE Lic. #SA560004000

 

In the past I've written several blog posts here on Active Rain about short sales.  And I'll still stand by my proclamation that NO ONE is a short sale "expert".  How can anyone be an expert on a topic or in a field that is constantly shifting, where the rules are constantly changing, and where each situation/transaction is different from the last.

A heart surgeon can become an expert because every human heart is the same.  He knows what he is going to find when he opens up the chest cavity.  Not so when a real estate agent starts to peel back the layers of a short sale listing.  And please, don't assume that I am equating a heart surgeon with a real estate agent.  We all know a real estate agent's job is so much tougher these days. Just kidding.

Yes, there are certain elements of every short sale that are the same.  The most elemental of these things is that the seller is selling the home "short" of what they owe on the property.  The basic short sale package is the same:

Purchase offer;

Listing Agreement;

Hardship letter from sellers;

Financial worksheet;

Two years of tax returns;

Pay stubs;

Bank statements;

And comparables of similar sold properties over the past six months.

But after that, nothing is the same.

Even if a short sale is with a bank your agent had success with in the past, don't count on them having the same success this time out.

Even if both loans on the house (assuming the sellers have a first and second mortgage) are with the same bank, don't assume it will be easy to get approval on both loans.  You would think so, considering the net proceeds are going in the same bucket when all is said and done.  But you'd think wrong.

Oh, and be sure there are no mechanics liens, or other strange things that may show up on title.  Have your title rep run a new title report every few weeks just to make sure nothing pops up in the eleventh hour to foil all of your efforts.

You see, there is no rhyme or reason a lot of times to short sales.

Yes, you do need an experienced short sale agent.  Because without one, you're chances of success are even further diminished.  But don't believe ANY agent that tells you they have a 95% success rate on short sales.  It is entirely untrue.  If there were truly as many agents having 95% success rates with their short sales the real estate market would be in a lot better shape than it is right now.

To paraphrase an oft quoted film character of the past, "short sales are like a box of chocolates, you just never know what you're going to get."

And remember, if someone claims they are a short sale "expert" RUN FORREST RUN!

 

Comments (8)

Karen Feltman
Cedar Rapids/Iowa City, IA KW Legacy Group - Cedar Rapids, IA
Relocation Specialist in Cedar Rapids, Iowa

You are definitely correct that there are no "experts" but you can be a great resource for information!  I think that every deal is unique and there are too many factors to be sure how it will end.  I have had about 5 short sales in the last two years and they have all been very different. 

Jul 29, 2010 03:24 PM
Kathy Torline
ERA Herman Group Real Estate - Colorado Springs, CO
Colorado Springs Real Estate Blog 719-287-1049

Great blog -- I especially like the title.   I think you are exactly right about short sales, you never know what it is going to be like until you start working on.  Everyone is different.

Jul 30, 2010 03:09 AM
Treva Fox-Christy
INTEGRITY REAL ESTATE - Farmington, NM

Ah Jerry, such a good write on short sales. They are the tests that try a Realtor's sole aren't they?! Every one of them a learning experience. Hope your week is full of pleasures and joy!

Aug 17, 2010 05:02 AM
Lawrence "Larry" & Sheila Agranoff. Cell: 631-805-4400
The Top Team @ Charles Rutenberg Realty 255 Executive Dr, Plainview NY 11803 - Plainview, NY
Long Island Condo and Home Specialists

Nice work keeping everyone up to speed on the market stats for your area. The buying public want as much info as possible when considering an area and your statistics are important in their process.

Aug 20, 2010 06:10 AM
Jerry Murphy, CRS, SRES
Long Realty West Valley - Anthem, AZ
Anthem, Phoenix, and Scottsdale AZ Real Estate

Thank you Larry and Sheila, and everyone else who commented on this post as well.

Aug 20, 2010 06:14 AM
Tim Lorenz
TIM LORENZ - Elite Home Sales Team - Mission Viejo, CA
949 874-2247

To true it is really a new waiting game everytime we take one of these.

Sep 13, 2010 06:44 PM
Victor T. Gurrola
Remax Realty 100 - Diamond Bar, CA
Diamond Bar Real Estate Professional

What exactly is so different from short sale to short sale other then the types of liens? The seller still owes More then the home is worth! The bank still would rather short sell then Foreclose!

With the proper foresight and due diligence(confirming all liens) Its very feasible to have that 95% closing ratio that you state does not exist but first we must qualify the situation. Make sure the seller is motivated to complete this arduousprocess, if they lack mmotivationwalk away. I have never had a short sale denied by a lender(as of 2009) remember its just business to them if the offer is good, the file is clean and we follow up correctly you should be able to close every file. My whole business is 90 percent short sale and yes I do close 100% of them (once in escrow). That doesn't mean I don't give back listingsif the sellers cant provide me the document's I ask for, over all if it makes it to escrow we are going closing!

Sep 14, 2010 12:13 PM
Ryan Case
SCA Real Estate - Anaheim, CA
877-828-0710

We shy away from Short Sales out here, they take far to long to close, and there is a low success rate in our County (Riverside)

Sep 21, 2010 06:35 PM