What Do You Know About Short Sales?
Having been a Bristow-Gainesville Short Sale Agent since 2007, there hasn't been a year that has gone by where I wasn't working on listing and selling at least one Short Sale. To say I have a lot of Short Sale experience is an understatement. And just like the real estate market, Short Sale banks have changed over time.
When Short Sales first hit the market in 2007, our Bristow-Gainesville market was crashing. Banks were taking offers that always seemed below market value. Only, the problem was, market value was in a freefall, so the offers they were taking represented that falling market value.
Unfortunately, there are plenty of buyers, with ill-informed Buyer Agents out there, that seem to think banks ALWAYS take less than market value on Short Sales. Here's the problem with that line of thinking...it doesn't take the current market into account. Unlike the early days of Short Sales, a Short Sale in 2013, 2014 or in 2015, the banks saw values rising and wanted every penny of market value. Some Short Sale banks even stretched to what market value would be in three months when issuing approvals. You might lose one buyer, they'd lose three more mortgage payments, but end up making more money when you did get another buyer.
As such, I try to price my Bristow and Gainesville Short Sale listings to not set an unreasonable expectation for buyers out there. If I advise my seller to go too low in list price, the bank won't approve it and buyers will be countered on their offer. Yet, the reaction of buyers and their Buyer Agents still 
seems to be offering a knee jerk 20% of list without having run a comparable sale. Flawed thinking.
If you try to explain to a Buyer Agent why that is flawed, you might get a retort from one that thinks they have been there and seen it all. "You aren't supposed to figure out the price the bank will accept. They are. Throw any offer at the bank and see what happens." Hearing that crap makes me cringe. Where's the fiduciary responsibility to Short Sale Sellers who are trying to stay current on their mortgage payments and have tax consequences on whatever isn't repaid of the mortgage balance?
Some agents think they are experts because they have closed a handful of these Short Sales during the downturn. They think sellers must miss mortgage payments and probably advise them too. The very agent who claimed expertise in the subject matter, who had closed only seven Short Sales in eight years, was growing more and more frustrated with me the other day. My response was that if she had done a lot of Short Sales, then she knew that being delinquent on payments wasn't required and that all Sellers now faced tax consequences. Our exchange ended with her deciding I didn't know what I was doing or was too difficult to deal with, so she wasn't going to show my Short Sale listing. Blessing in disguise for my Seller. They don't need to be tangled up with a buyer with expectations that will never be met. My only hope she went and looked up my Short Sale production for the last eight years like I did hers. While she closed seven in eight years, she'd have found I closed forty, with two more coming up, in the same time period.
If you are facing Short Sale, there is much to consider and your Listing Agent shouldn't have a thow an offer at the bank mentality if they are truly protecting you. Buyers who slept through the down periods of the market are out now thinking Short Sales are those missed opportunities from years past. Unfortunately, those buyers are a waste of your precious time.
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