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Short Sale Fail – A Series on Questionable Things I Run Into With Short Sales: CDPE Disclosure

By
Managing Real Estate Broker with Jon Gosche Real Estate, LLC - BoiseMeridianRealEstate.com Designated Broker DB29503

Blog post written by John Boles and edited by Kasey Boles

Short Sale Fail – A Series on Questionable Things I Run Into With Short Sales: CDPE Disclosure

When working with buyers I often run into listing agents forcing the use of forms that leave me wondering. For instance I was showing a house this past week and the agent included the below form as a document to be included in a contract. It is a CDPE form (Certified Distressed Property Expert). I know some CDPE's who are great short sale agents, but I also know some who have sold little to no short sales and simply have the designation because they took the class.  On a side note, make sure that if you are interviewing short sale agents you don't only look for designations such as this but you also ask them two very important questions -

1)How many short sales have they successfully closed?

2) What is their close ratio (short sale listings taken to once that actually proceeded to closing)?

Number one is important because though no short sales are exactly the same, you want to make sure that they have the experience and knowledge necessary to complete your short sale.  Number two is additionally so important because you don't want to be just another number in the failed short sale pile.  In our area of Boise, Idaho and surrounding the failure rate for short sales is around 70-80%.  That means that 70-80% of all homes that originally go on the market as a short sale DO NOT CLOSE.  And that means that they either go into foreclosure or the homeowner takes it off the market and has to keep it.  

CDPE Short Sale Disclosure

Anyway, back to topic of this blog post. 

The CDPE has their trained agents using the above form that has more than 1 questionable item on it. For this post I would like to focus on Item #2.

Item 2 States the following. “The seller will receive no cash from this transaction (unless it is a HAFA short sale). Any funds usually due to the seller will be paid to the lender.

This is inaccurate.  Just a week or two ago I wrote a post entitled Boise, Idaho Homeowner Receives $13,000 Selling Their Home As A Short Sale.  I have been able to obtain cash for sellers on more than just HAFA short sales and have the approval letters to reflect it. If your agent is using this form do they know that they MAY be able to negotiate a Seller Incentive paid to you upon closing?

As a Seller you need to know you have a competent agent working for you. You are not guaranteed to recover any money from a short sale as a seller but if you could why wouldn’t you want help with moving expenses, rent at your new place, etc.?

If you as a buyer see a form that has this specific wording on it included in your contract be careful and ask the agent why they are including that form with that verbiage. Make sure that your agent can find out the success ratio of the listing agent who is negotiation the short sale or you may be in for a wild ride.

Call me, John Boles, if you are considering buying or selling a short sale in the Boise area - 208.830.6185

Comments (4)

John McCormack, CRS
Albuquerque Homes Realty - Albuquerque, NM
Honesty, Integrity, Results, Experienced. HIRE Me!

Kasey -

I'm taking a guess here... I've only a few short sales.  Not my area.  I'd say maybe five have closed.  I've lost short sale closings to around 5 more. My buyers got tired of the game and moved on to find a regular home sale.

Apr 16, 2012 12:44 PM
Kasey & John Boles
Jon Gosche Real Estate, LLC - BoiseMeridianRealEstate.com - Boise, ID
Boise & Meridian, ID Ada/Canyon/Gem/Boise Counties

John, that is something that happens quite frequently - buyers getting tired of waiting.  Short sales are really something and a buyer has to really have patience.  When my buyers want to consider short sales I sit down with them and give them the good (not much of it), the bad, and the ugly.  I lay it all out there and tell them how terrible it can be and then if they still want to do it we go for it. I also do the research as a buyers agent to make sure we know what loans are on the property, which can be a good indicator as to whether or not the short sale will be successful, that the listing agent knows what they are doing, and if they don't know what they are doing I make sure they are willing to take advice from my husband, who is a rock star short sale negotiator. It is so tough but I have gotten some of my buyers into some great homes with short sales.  Some of them have been smooth, some of them have been rough, but all of them have ended up happy so far :-)

Apr 17, 2012 12:13 PM
Sherry Peckhoon Sim
Sims & Company - Cayucos, CA
Broker/Owner, Covering the Beautiful Central Coast

Hi Kasey, I applaud you for educating your buyers who are considering buying short sales.  There are expectations to be set, and often times, buyers don't understand what a short sale entails. I do have the CDPE designation but do not use the CDPE forms, which are more generic. I prefer to use forms prescribed by our state association, which are applicable for CA.

Apr 23, 2012 01:10 PM
Kasey & John Boles
Jon Gosche Real Estate, LLC - BoiseMeridianRealEstate.com - Boise, ID
Boise & Meridian, ID Ada/Canyon/Gem/Boise Counties

Sherry, thank you.  Short sales are such a beast.  But, they are still a part of the market and it is essential for sellers AND buyers to have an agent that can help them navigate through these if they are going to consider them.  Thanks for your comment and good luck with all your short sales!

May 06, 2012 04:58 PM