Home : Blogs : Mike Norvell Sr / Norvell Consulting Group : Mike's Blog

NAR SHould Ban Short Sales

***************************************************

Update.....Due to the responce on this post, have contacted our local board and told them I will be forwarding these replys on for their consideration. Comments with solutions would be appreciated..Thanks

***********************************************

What if we just quit....Yes, If we just QUIT..Just QUIT doing short sales...

For one thing, we would get rid of an entire category of People Complaining about how this bank or that lender is not responding, not meeting deadlines, won't call back, is wasting our collective time and our customers time..For what??

What would happen??? The banks would turn on the charm and set up programs to either move the houses in short sales or run them into full foreclosures and let them be actually sold REO

I am personally mad at the time I have wasted, and the unbelivable amount of time, money, and total effort that Realtors as a whole spend on marketing bank properties. For nothing. The statistics continue to get WORSE, not better. My point , again, with all due respect, is that we go into a short sale situation with a less than 20% chance of getting the job done. We work to hard, and the banks give us less than zero respect.

We as Realtors are doing the job of marketing for the banks, why should they change. They know how to market, look at all the ads on TV and Radio, non stop. They don't have to market the forclosure properties when we as Realtors are perfoming slave labor with a ever widening gap of actual short sale closings to non closings....What do you get for that time. Just Frustration over 80% of the time..What about your client...They get the same, and you stand the possibility of losing a valued buyer to another agent with a property ready to be sold now!

My premise, and it is only mine, is to tell the banks to handle their own mess, and when the properties are ready for sale, then get out of the way. I have dealt with REO sales, they are short and sweet, the banks want them closed in days, not weeks. Banks are as a whole treating our profession with absolute disrespect, and we are letting them get away with it by treating them like spoiled children that won't agree to follow any set of rules.

To the right is where the short sales should go...Lets just give the handle a good flush and wait for the banks to clean up thier mess. ...Go, ahead, hit the handle, you know you want to!!

Screw the banks. Let them foreclose, and clear the properties for actual sale. We owe it to ourselves and our customers to not be involved in chasing homes that are not yet actually for sale. I wish NAR would put out a directive instructing all agents to quit marketing short sales, and then I believe we would see a very different reaction from the banks. Presently they ae NOT treating us with respect, they are not dealing with us like we are equal Proffessionals that deserve such respect.

Again, I say tell them to go market thier own properties that are in foreclosure, and the over 6,000 new homes going into foreclosure EVERY DAY....Me, and many like me, will wait patiently for them to release the cleared properties on the other end...My time is too valuable to play these games, we as Realtors need to stand up and just say NO.

Posted by Mike Norvell Sr / Norvell Consulting Group on 06/02/2008 01:38 PM

Comments (215)

mike norvell sr, mortgage meltdown, fiber in your diet, developers capital realty raising cash for your good deals

Generate short URL

This post has been included in Florida Real Estate News Lake County, FL Real Estate News Leesburg, FL Real Estate News
Post is included in group: Realtors®
Post is included in group: The Lounge at Active Rain
Post is included in group: Dedicated Bloggers
Post is included in group: This Doesn't Belong On Active Rain
Post is included in group: 'JACKED!!!!!

215 Comments on NAR SHould Ban Short Sales

JUN

2008

Frustrating working the short sales. I do agree that it would probably be easier to just get the short sales off the market.

Mike-

The properties are for sale, justb not at the price listed! I'm guilty myself- the lender never told me that they would accept $X, I did an analysis and came up with the price myself. I am sure that things will change in this regard.

Mike, great rant. You are absolutely 100% right. Something drastic neds to be done about the ineffectivenes of the banks.

Mike, a 20% chance of success almost sounds like you'd be better off selling houses at Open Houses.

Indeed. The banks have been revealed as grossly incompetent in real estate sales.

Good luck with your thesis, you would stand a better chance of surviving a cobra bite.

Don R.

Chuck...They are clogging up the system, actually slowing down the viewings / showings on existing properties that REALLY ARE FOR SALE now

Aventura | Bal Harbour | Sunny Isles Beach | Realtor® (SIB REALTY, LLC

This is what I mean by clogging the market, why are we even allowed to list properties at prices that NO One has agreed to sell the home for...I still don't get it..thanks for posting, and I would really love to know why you engage in this practice when the results are so frustrating, to the seller, who gets nothing, and to you the Realtor, who the majority of the time ends us just wasting time and resources...As I have stated, I think it should be a obvious decision to move onto good business

Lisa..I think I am right too...so if you told four Realtors and they told four Realtors...get it??

Yes, Amen... If they were all gone we might actually start seeing reasonable sellers that have a little equity be able to sell there homes in a reasonable period of time.

As is Shortsales in many communities are giving a false since of where market price is. In my market pulling an number out of the air that the listing agent feels will draw traffic is very common...

And there is plenty of blame to go around...Why should a bank that is holding offers for a property 15% less than recent REO sales act on a short sale when a foreclosure might yield similar results..

Not that I wish people I'll but REO Properties move...Short Sales linger...

JUN

2008

Mike- In that I agree that the banks are inept and incompetant to handle short sales, it is a great niche for us. We close 100% of our short sale listings. We do not work with the buyers side of short sales. While it may be frustrating a foreclosure on a seller's record is worse and our goal is to help our sellers complete a short sale and move on with their lives. I am constantly surprised that agents can't seem to close their short sales. We have also made great headway with Countrywide and know their system so well now, that our transactions go very smooth with them now. We are even getting short sales approved before we have an offer on many of our listings. We also have negotiators at the lenders referring us to the homeowners to be their agents.

Gary...SHort Sales in the same breath as pen Houses..now there's trouble.....Nice to see ya here

Lenn...The banks have been revealed as incompetent...from originating loans that should have never been, to now denying loans that should go thru...I am hearing quiet talks about our banks being bought up from within thru bulk stock purchases...........this is the new way of aquiring property??

It is incredibly ignorant for any of us to call the banks "incompentent" when most agents have NO idea what goes into the short sale process from the banks' perspective. Agents expect to be able to make a phone call to one person and get a short sale approved within moments because it makes sense on "our" end. In actuality, it is a very involved process which includes researching the laws of the state/county/township, analyzing the borrowers' financial picture, analyzing the sales statistics for the surrounding area, getting statistics on how many other loans the bank has in this particular area, does the borrower have additional accounts/loans with the bank which will be effected, etc. Yes, my husband works for a very large bank and handles QA for the foreclosure process. Are the banks perfect? Absolutely not. Are the banks overwhelmed by the volume of shorts and foreclosures? YES. Are we in a market like no other we have ever experienced? Yes. Let's quit pointing fingers and quit name calling and try to make things work instead. Remember, without banks, none of us would have a job.

Scott This is one of the basic flaws I see in our MLS..It allows agents and brokers to advertise a listing price that no one has agreed to sell for...all legal with the little catch phrase " subject to Lenders or other 3rd party approval"....IN the retail world, if Wal Mart did that, there would be news crews all over this story. Try going to your local supermarket after reading the ads, only to have the store clerk tell ou that sale item may be purchased later, maybe, for that price or maybe more..Maybe not at all...WOuld you not look at the other simailar item on the shelf and say, Can I have this one for the advertised price??? Imagine the delays at the check out counter..this is what we have with the short sales...

Don...I don't expect the banks to do anything..they are in total gridlock....I am just putting this out there to raise awareness on this issue...If agents and Brokers could petition the MLS and local Boards, then maybe a bit of self regulation by our industry would start to level the playing field for those who really need to sell thier homes, and keep the real buyers focused on homes that are really available now

Tina..thank you for making my point..I am sure you love your husband very much, but it doesn't change the fact that agents don't know what to do because there are no set rules. Banks don't have the staff to deal with sales on a buyers timetable, and that is again my point..Again, lets leave the banks alone, let them foreclose on the proeprties, and when they are ready for sale, then give the property a green light and sell it...

Calling agents ignorant for calling banks incompetent is.....well, lets just say I don't agree with that statement.. I dn't agree at all

Short sales are indeed a royal pain in the rear! If I have 50 homes to pick from and half are short sale, guess which half I am going to work????? With the current flood of listings, there are more than enough to show without going through the short sale listings!

This is indeed a hot button issue with Realtors. I personally don't like the hassle and the banks have made it very uncomfortable. Glad they are not in the RE business.

Mike,

I`m with you pal!

Wow - you picked a subject that is very much on point for me right now. I just finished a short sale - you know, one of the fun ones with two mortgages attached to it. I think I'm down to a whopping .05 cents an hour on this one. I had put hours and hours of man hours negotiating with the first and then negotiating with the third and then finally getting someone who would even talk to me to negotiate on the second. By the time I had the third notarized and ready the second said to me and I quote,

"we're not going to keep on doing these short sales while the Realtors keep getting rich. You'll need to cut your commissions on this short sale is not happening."

Now, I could've played hardball with her, my client gave me permission to netiate on his behalf, but the bottom line here is at this point all of the other work I had done up until that point could have gone completely down the drain. Long story short both myself and the buyers Realtor agreed to an additional cut of over $1,000.00 each on our commissions.

Let's examine this womans comment though as it pertains to your blog. "...while the Realtors get rich?" Are you kidding me? Who makes the commission when it goes to foreclosure? Sounds to me that the banks need to start making the short sale much more, uh... user friendly. I know several Realtors that will no longer touch ANY short sales and yet others only if there is no other mortgages attached. Something's gotta give.

Mike, your frustrations are being felt by many Realtors and buyers alike right now. The banks are very overloaded and under staffed to handle the flood of short sales. One MItigator I deal with at countrywide is working 430 files at once. As with any business, focusing on your core duties as a Realtor will yield more consist ant results. Core duties being selling Real Estate. When you try to incorporate doing short sales into your daily routine, the administrative nightmare compounds exponentially. Hire out the short sale management and negotiation headaches. While you focus on selling properties and helping homeowners, our expert team of negotiators and administrative people will get you the written approvals so you can close escrow.

Whether you use our company or someone else to outsource these short sales to, it will completely revolutionize your Real Estate business. Even for Realtors that consider themselves experts with short sales, the amount of time to complete one is counter productive to your core business.

Take a look at our website and if you would like us to help you realize sizable profits and zero headaches with short sales, give us a call.

www.RealtorShortSaleSuccess.com

Amen. Unfortunately when they finally do go thru, it does help the seller out.

But UGH. I am still waiting on one to go thru that we submitted in February.... the VA... YIKES.

But the fact is as a buyer's agent, I can't avoid the damn things - they're everywhere. And all the buyers want a frickin bargain so are chomping at them, because they're advertised at this crazy price.

I've actually listed my first 2 shorts just this last month. Both got offers this weekend, so I'm about to join that ball game on the listing agent side. I already hate them and I haven't gotten too far into it yet, lol!

I too believe it's not right to advertise a home for sale at a price that might not work. Even at full price with no assist, you have no idea if it'll go thru!

Oooooo great idea! I also agree with Michael, the appraiser, about pollution of the MLS. There should be a separate area for these. Some investors are willing to write offers sight unseen and wait forever and a day. Some buyers are not.

Your post reminds me of last year when I was our Association President. Agents would stop or call me and tell me what rules our MLS should impose. While I sympathized with their reasons, the issues usually were outside of our control. Shortsales are just the same. NAR is working on the problem but they have no power to ban them. I'm amazed that some MLSs don't have a way to filter them out of searches. Thanks goodness our MLS makes it a mandatory field so I just choose not to work with them. The time spent on shortsales is better spent on prospecting.

I am in total agreement. Let this be my declaration - I'm done with short sales as of this moment - ok, the one I'm working on has to close first...but then, doggone it, I'm done! I'm supposed to be out in the sunshine today, but I'm stuck fighting for an appraisal value that is struggling due to other foreclosures...

I have worked to rescue people over the last three years, and I realize now, it is too difficult on my health and family, not to mention for nearly zero dollars - getting rich, my eye.

I always consider these sales my opportunity to give back to those less fortunate - but from now on, I will work at a food bank or swing a hammer at Habitat for Humanity or Rebuilding together.

I support the boycott of short sales. Banks are using us and we are letting them.

What legal right would NAR have to deny a seller the opportunity to list and sell their home? Whether it is a short sale or an ordinary sale the NAR has no authority in this mess. It is up to the agents who are accepting these listings to make sure that they are closable (is that a word?)

I have successfully closed two of my short sale listings (in less than 60 days) and have a third that is just about ready. I have priced them according to the market and not thrown out a teaser price just because I think it is fun. Agents and buyers should know up front what they are getting into with a short sale. If you don't want to sell them then don't. It is as simple as that!

There are people who are successful and have figured out the game...i.e. Vicki in northern Illinois who has had phenomonal success. "Screw the banks"...hmmmm....sometimes we would like to given the amount of red tape and time it takes. The other side of this is that short sales are far healthier for someone's credit than foreclosure or bankruptcy...I hope to do some more short sales and do them well...and truly be a service to the person who....maybe for a reason beyond their control, is losing their home.

And these are the folks who are trying to enter the real estate market ?

Mike,

Mortgage lenders seemingly are just dragging their feet on short sales and everyone has his own explanation as to why. Regardless, short sales are slow, if they happen at all.

You wouldn't perhaps also be of the mindest that NAR should discourage Realtors from helping a homeowner and his family from ruin that's been served a foreclosure notice because it's not profitable enough for you, would you ? Live in the ghetto for a while, Mike, and work with homeowners, and their families, whose combined family income is less than 20 thousand dollars a year. It's not the affluence and roses of Leesburg. Agents and banks are, indeed, saving families with the short sale, and the families credit as well. Multi-million dollar and high-end properties present a little more challenge for the banks. It's not the average situation in urban America. I think, perhaps, we should respectfully say 'no' to your idea.

Great post...I'm dealing with one right now and waiting 7 weeks so far with no response.

It would be nice if every sale were easy and immediate. But the truth is, of the short sales that are successful, they can be great buys and really help the sellers out of a financial mess with less of an impact on their credit.

The banks are finally getting it in my neck of the woods. When we have the properties listed, we close 99% of them. (When we haven't closed, the buyer backed out last minute.) I'm sure they will catch up where you are too.

I know it's frustrating, but it's great pain for greater gain.

I don't get it. Why the banks don't just deal with these unstead of letting these sales go to foreclosure and then often taking less money than they would have gotten at the short sale.

Instead I think there is a better chance that we will see a new designation in the next year for CSSS (Certified Short sale Specialist). It will take 8 hours of CE to get, and will cost designation holders $100/yr to maintain. The NAR is pushing Short sales as the new "niche."

Great Post - I am actually going on a short sale appointment tonight - my first. Now I'm really confused about getting involved. Sounds like too much work.

Mike,

good point...they waste out time with no respect to us...they don't even look at the contract date let alone call you back..they should be ashamed of themselves...after all if they didn't start this mess they wouldn't be here now...we are trying to help them make a deal and make us a few bucks as well and all they care about is themselves.

It's a banking problem not a RE problem..if they didn't lend money to people who couldn't even afford a cell phone bill with a 450 credit score we wouldn't be in this mess and now their excuse is that the loan officers and the middlemen who approved these loans are out of the business and no where to be found. Yet they want to make their pile higher. I wouldn't be surprised if the people who work in the loss mitigation department are not even fully qualified to know what it is like out in the field...they should make them go on caravans just like us to see the inventory they are playing games with.

Thankfully the one's I've done have gone through but not without the usual hassels

Mike, While the banks are indeed a pain in the ass I have sellers that need to get a short sale approved. I have 3 under contract right now and I expect to get them ALL closed. It won't be easy but I started communications withe lender BEFORE I listed the properties. I also listed them at a reasonable price and then we do a 10K reduction every 10 days until we get a contract.

Personally, I think a HUGE portion of this blame needs to go on the REALTORS(R) that are taking short sale listings that don't have any experience or a clue with what's involved. Short sales in my area are actually selling for higher prices than the REOs, so that's a good thing for my market as a whole.

As frustrating as they are I don't feel throwing these sellers, in need, away is the right thing to do . No one ever said our job was supposed to be easy. This too shall pass. In the meantime, I will attempt to assist as many sellers that QUALIFY for a short sale as I can.

Aren't they a pain in the backside? Mike Mueller wrote an interesting piece a few weeks (months) ago about lenders possibly taking out PMI on 'risky' loans which was floated that as one reason lenders are so unwilling to deal with the short sales. No need to add staff to deal with something you're guaranteed to get paid for. Personally, I swore off short sales... they are waaaay too much work in my opinion. Any that come my way these days get referred out.

Not going to happen. There are probably about 200,000 licensed real estate agents who will take the short sales without any knowledge of how to manage the transaction.

Mike, GREAT POST! I've been looking through the comments and I have to agree with most, this whole short sale issue is a pain in the ass. I have several "normal listings" and they're not getting the number of showing I would expect. As I've stated to my sellers and my broker, they can't compete with the exagerated short sale prices. You and I know that the banks rarely approve these seriously low listing prices, but people flock to them none the less.

I just put up another post on the subject. Buyer clients want to see these listings, because they are looking for a deal. I'm finding, the majority of the time, that these listing already have contracts (ratified and sent to the bank for approval) and they are still marketed as "active". I'm on a campiagn with my local MLS to publsih some rules covering short sales. The "third party approval" is a contingency!! These agents need to change the status and let us know the house really isn't available. I've come to the point that I refuse to show a house until I've reached the listing agent and confirmed is truly is still available.

Most agents today don't have a clue how to work a short sale. I've heard agents say they sent a contract to the bank without the sellers signature because the seller can't sign until the bank approves the contract. I've had agents tell me that have not submitted a short sale package to the bank, because they are waiting to get a contract. The horror stories are unbelievable.

What to do????????

Other than the Bill buress fiasco, this might qualify as one of the dumbest posts of the year. Thank God for guys like Broker Bryant.

Here's the deal. The NAR does not have to ban short sales, how about since we are talking in the fantasy realm that the NAR ban agents who have no business being involved in short sales. That would actually do the trick. It's absolutely amazing how many agents became short sale experts overnight without the slightest clues on how to perform them.

Short sales are very lucrative, and not hard at all to execute...for those who have experience in doing them and know what the heck they are doing.

Some banks have gone as far as to not wanting to do short sales if a real estate agent is even involved.

We speak to bank reps all the time and they speak of the horror of working with the ill-prepared, inexperienced agent who just is trying to wing it.

They don't know the effect of PMI, don't know how to perform a regression analysis, don't know how to prepare a proper inspection and repair report don't understand how to influence the bPO, don't even know how to market the deal to the most likely prospective buyer!

All they want to do is put it on the MLS, and send a contract to the bank and let the bank pick which contract they want. Losers!

yes, these are strong words but so warranted. I wouldn't go to my lawyer to have a tooth pulled. Just becasue you are a real estate agent it does not by any means qualify you as being proficient in executing a short sale.

If you don't know what you are doing and can't take the time and effort to do them correctly how about just saying no if the phone rings! That will make it so much better for the rest of us.

So should the NAR ban short sales, absolutely not! Should the NAR or Realtor board or broker ban the agent who hasn't a clue and does not know how to properly package and sell a short sale..PLEASE..AND HURRY!

When did it become a character flaw to say you don't know how to do something. The real estate agent would have much more credibility if they just admitted to a caller, hey, I am not experienced in short sales, can I refer you to someone who is?

Get out of the way!

To all.....I came in today after a fantastic series of events to find another:

A gold star........I thank the voters that flagged this.

I posted this to raise awareness.. I do certainly realize the complexities involved in doing short sales, and simply hoped that making a post about it would bring some good ideas out.

I love it when a plan comes together. I see the majority of the comments are for removing short sales from the MLS, or at least segregating them into their own category. Short sales are now and will in the future be a part of our business, why can't we have a more orderly way of dealing with them.

I would also make a motion (where is my gavel?) to do the sellers and buyers we should be representing proper justice and work with an experienced person in the short sales arena until you get the experience on your own.

I think the rest of the comments speak for themselves, as I said, I wanted to raise awareness for this very important subject. Again I thank all that have left comments, I do appreciate being part of this really valualble discussion.... Me, I have to get back to work writng up contracts for the wonderful day we had down here wrritng up three contract offers on commercial properties today..

Good luck to all...C ya

May I throw anoher wrench in this topic? From what I understand, our E&O insurance does not cover agents negotiating short sales.

Here we go......a listing agent meets a seller who has recently lost his job and is "upside down" on his mortgage (he actually has a 1st and and 2nd). "aha!" we'll do a short sale! Well, 6 months after closing on the short sale, the "seller" still does not have a job and meets with an attorney to file bankruptcy. The attorney says, "Mr. Seller, why did you do a short sale? If you had not done that, we could have filed bankruptcy, and gotten a reprieve from the bank. Worst case, if your property went into foreclosure, the mortgages would have been totally wiped out and you wouldn't have a deficiency judgement against you (as you do now)." Who is the seller going to sue?

Tina in Virginia

tina..please see my previous comment. No disrespect intended...but the question you framed places you smack dab in the middle of the real estate agent crowd who has no idea how to do a short sale nor have any clue about its ramifications.

The question you posed is a huge "uh-oh". Back away from the short sale..slowly turn and run the next time any one calls and asks you about doing a short sale. You obviously are not prepared and not experienced enough to know what you are talking about. That's not a bad thing unless you are still trying to pretend that you do know what you are talking about. So hopefully this was just a hypotethical answer designed to acquire a few AR comment points.

If it wasn't..and you were serious...the line forms to the left.

Sound harsh? I'm sorry but with as little experience that you have in this area (ascertained from your question), you are most assuredly winging it as the result of some class you took at the local board of realtors.

This is serious business. Why not just leave it for the true professionals and experienced individuals who know what they are doing.

Before you respond angrily think hard..I did not expose your shortcomings. I just said your question did...I would hate to have to respond and provide clarity in regards to your incompetence in this area.

Please people. This is a serious matter. This is people's livelihoods. Please don't experiment for your own amusement.

You are so right. It is a waste of time to try to do short sales. I hate to show them and I don't want any short sale listings.

Tell the NAR to stop lobbying against banks selling real estate. Let the darn banks sell real estate; they caused the mess !

Such an interesting perspective. I can only imagine what you must be experiencing in your area. I know Las Vegas has been hard hit.

The banks are obviously not set up to handle asset liquidations. That's really good for buyers!

My client recently bought an REO condo and the bank and their agent got things so bungled that we got the price down another 15% from price we had just negotiated...they did it for us!!

Short sales are a joke. There are so many people involved and some anonymous bank officer makes the final decision. Then, there's the outrageous prices that are applied to these so-called "short sales"... unbelievable! The bank departments handling short sales have no idea what they are doing.

Hi-

The biggest point of a short sale is to help the seller get something out of their house.

Banning short sales would hurt some good people... im sorry i cant agree... although i understand the frustration....i did this one short sale in particular and didnt know my commission until 15 mins into closing....thats just the way it was....

but, on the other end of the table was a young woman who was more than relieved that the burden is gone....

have a nice evening.

I might be the only one here, but I've had MUCH better results with short sales than I have had with Bank Owned listings. At least then I'm in control and not the bank attempting to dictate to me like I'm their employee. With a short sale if you know what you are doing and you are dealing with almost any of the larger banks you are going to get results. At times they are frustrating but mostly just time consuming with keeping everyone in the loop and on the hook.

Nice rant Mike. But... here in Ann Arbor we've been able to put quite a few short sales together. They still suck up a lot of time though.

JUN

2008

Short sales are frustrating all the way around. So many buyers want to see them not really understanding the odds against them. Thing is they do close just often enough to keep hope alive, like the one I closed for a buyer a month ago.

Sorry, but I didn't take the time to read all the responses so forgive me if this has been said before.

It's all about supply and demand. There are starving agents out there who will work for next to nothing, spend more than they can afford to spend and pray they will eventually get a check. You can be mad and quit short selling for tomorrow, but there will be hundreds of agents ready, willing and able to take those short sale listings when you walk.

For what it's worth, I don't work them anymore either.

Washington state just enacted a law which requires further disclosures regarding Short Sales. And it makes agents working for sellers of distressed proeprties, as well as Buyers offering to purchase the short sales, into "Distressed Property Consultants".

It is creating some interesting conversations. Especially since our MLS refuses to include language allowing us to do that in our Buyer Brokerage and Listing Contracts. Each Broker has to draft their own listing contract if they want to work with these properties. I think it will also help us have the Buyer Agency conversation. Some unforeseen consequences... Real Estate is always interesting.

I think Guy has it right. Short sales are a lot of effort for the return but make sense for a lot of agents.

Not sure what the answer is, but short-sales are anything but short. They are time consuming and generally offer little reward for either the seller, buyer, or the agent.

Short sales will be with us for the next several years, whether we like it or not. It is the reality of the real estate market. We all have the power to choose. If you do not want to do them, don't. If you want to learn and grow, do become educated in the process and do them! Some agents have turned this niche market into a lucrative career. Many sources are quoting "if you do not do short sales, you will probably be out of the business within the next two to three years."

Lead, follow, or get out of the way!

Apparently there are quite a few experts out there doing well in short sales. Maybe the thing to do is to find one of these Pros and work with them if you are inexperienced in doing it yourself.....

My challenge to all who read this is to consider how you market yur short sales in the MLS...Placing these sales in the mix with normal Re-sales at prices that will not be accepted is an obvious bait and switch tactic that is unfair to those left to advertise by the accepted rules...

I pullled a search last week in my local MLS and was blown away by the amount of homes being advertised for less than what the average home would be for in that neighborhood....You guessed it, they had that little blub about contingent on third party approval...I am looking for a home for one of my sons and his new soon to be wife, they did not understand how these homes could be advertised for a price they would not sell a home for..

We found one home, 3 bed, 2 bath, 2 car garage, listed for 126k...I called and told the agent I was sending an offer over, and wished to close in 30 days.....Ohhh no, we can't actually sell the house for that, we have to see what the bank will take...I asked, what price is approved....wellll....239k is the balance on the home ...Who made up this stupid Price, wasting my time.....Then I get the speech about this is allowed because of the little 3rd party approval line... These homes should have their own category in the MLS, and not clog up homes ready for sale right now..

Hey, Cindy Jones has a neat post about my post here on short sales..The beginning starts off with how shocked she is that a post about having NAR ban short sales is being featured, but then helps me make my point...As most of you now realize, I don't believe NAR should do anything..they do enough running the ads for "Buy a Home Now" on national tv. NAR would not do anything like this unless they could figure out a way to make a big buck out of it and charge the Realtors more in dues.....

But I did pull the bottom of CIndy Jones post and thought I would post it here...She seems to be making my point more elequently than I can, so I herby quote Cindy Jones

_________________________________________________

This issue has little to do with the sellers but a lot to do with both the processes that the lenders have in place (or lack thereof) and the brokerages for not overseeing their agents who have short sale listings.

Why aren't brokers requiring agents to provide a copy of the completed short sale package, contact authorization and lender information before allowing their agent to place a property in the MLS? Where is the check off of the CMA that shows that the value the agents are putting on the property is the current market value? I realize that brokers are busy people but I also realize that in the end the buck stops with them. Eventually both the agents and the brokerage can get a black eye if the sale falls apart at the final hour.

As an association of 1 million plus members we should have a voice with the lenders to help them understand that the processes that they have in place and the hours that their processors and negotiators work are not going to handle the backlog of files. I for one would be glad to meet with any lender large or small and talk about business process engineering.

Success with short sales is possible. It takes preparation and it takes time. However until our brokers put the stop on the wholesale listing of any property without all of the prep work being done then it will continue to be a frustrating process for everyone. I spend a lot of time trying to get it right. I have listed and closed short sales but I know my limitations and I'm not going to put a house on the market that shouldn't be.

_____________________________________________________________

Thanks Cindy, thats what I should have said...Good job

I agree. The issue of compensation is vague as well. Is it worth the hassle? To some people perhaps, but the buyers have the ultimate decision to make of waiting it out or not waiting it out. As the foreclosed properties clear the way for faster sales to be achieved, short sales look unattractive more often than not.

Great posting Mike! Most of the time, the banks see it as throwing bad money at bad money. Maybe you should see it the same, as your pockets probably aren't as deep :)

Scott

I'm stll waiting for an answer from the bank. I submitted the offer in February 08 and now it's June 08. There's always an excuse. I will never do one again.

Mike... nobody ever said short sales were short on time to process. These do take time to run the course. The lender is actually discounting the mortgage payoff in the short sale.

If the banks could get their paperwork together before listing these properties, then MAYBE we could do our jobs. It is a long drawn out process and not only the client but the realtor gets very upset at times. This waiting costs us $$$ as we advertise these sales, both in newspapers, magazines, and also on the internet - It all takes time with sometimes small payout at the end when it finally closes.

JUN

2008

To all that have Responded....I am amazed at the comment here..I don't feel it is neccessary to recomment on every one, but I would like to really see what everyone thinks.

I am going to forward this to our local MLS board when it appears to be done, in the meantime, i do appreciate the input, opinions, and even solutions offered by all that have taken the time to write in.

Thanks again, Mike Norvell SR

I have been very lucky that I have not done any short sales yet! I think it would really help if the lenders would come up with a list of what their position is on short sales, what they would require in order to consider a short sale, and just a list of the enitre process according to their individual lender needs. Probably won't happen

Have A Great Day

The more classes I attend about short sales, the more convinced I am that I prefer to avoid them, and I share my opinion with my clients. Fortunately, we do not get many in our immediate area.

Great post Mike! While I don't agree with everything you had to say you really hit on a raw nerve. I myself am a former bank manager and commercial loan officer so I have had the opportunity to see both sides. I will be back to give you my insight later. But thanks for inspiring the lively exchange!

Good one Mike! I try to avoid short sales. I won't take a short sale listing. If I have a buyer, I talk to them about patience to see if they have enough. By the end of the discussion we are looking the other way.

I am with you here. they are just a pain . Better off with out them...

I get tired of showing a home that the realtor has listed at a price they are not sure thay can accept. A lot of the agents haven't done any work before hand with the bank. they simply put a price on the home and pray the bank will take it. Then you wait weeks with a buyer who calls you daily for an update. There should be some professioanalism involved on our end.

However I don't believe NAR can or should be involved in this matter. NAR has to be very careful and regulating business practices in today's environment

You really stirred a pot with this one. I know many of us feel the frustration when it comes to dealing with the lenders. Unfortunately, we have to consider the families who are in desperate need of our expertise.

Today I forwarded this blog to the directors of our local board, and I am also going to forward it to the MLS as well...

I have learned quite a bit from all these responces, I had no Idea this subject would have this type of impact..It looks like the majority wants a change in how short sales are handled, some very good ideas have been put forth here..

Thanks to all who have responded...

The Banks Caused this MESS! THEY SHOULD FIX IT!

I HAVE ONE THAT WAS SUPPOSE TO BE A QUICK SALE,SUPPOSE TO CLOSE OVER 60 DAYS AGO AND I AM STILL WORKING ON IT,SUPPOSE TO CLOSE THIS WEEK TWICE AND STILL HAS NOT HAPPENED RESCHEDULED FOR THURSDAY AT 10 AM AND I AM NOT HOLDING MY BREATH,I HAVE WENT ABOVE AND BEYOND BEING A REALTOR ON THIS ONE,THINGS I SHOULD NOT HAVE HAD TO DO,COMMISSION IS VERY VERY MINIMAL,THAT HAS BEEN NEGOTIATED TWICE AND LOOK WHERE IT GOT ME,NOWHERE.I GET THE RUN AROUND EVERY OTHER DAY AND NEARLY EVERY DAY A NEW PROBLEM,DRIVING ME CRAZY,VERY DISAPPOINTED.I AM THE BUYERS AGENT AND MY CLIENT IS VERY UPSET NOW.CALLS ME DAILY-SOMETIMES SEVERAL TIMES DAILY.MY CLIENT TURNED THE UTILITIES ON IN HIS NAME JUST TO BE ABLE TO GET INSPECTIONS COMPLETED, I ADVISED MY CLIENT NOT TO DO THIS.THE BANK REFUSED TO TURN UTILITIES ON,AND FOR OVER 60 DAYS HAS HAD MULTIPLE UTILITY BILLS,HE IS NOT HAPPY THAT HE KEEPS GETTING THE RUN AROUND,I AM LOSING MY CLIENT THAT I HAVE HAD FOR 6 MONTHS,SOME OF THE GOOD DEALS ARE NOT SO GOOD AFTER ALL,JUST CAN NOT GET THEM CLOSED EFFICIENTLY,WE WORK VERY HARD TO BUT IT JUST DOES NOT HAPPEN.IT IS MAKING IT HARD,I WILL KEEP TRYING BUT SOMETHING HAS TO CHANGE.WHEN YOU HAVE SOMEONE WHO HAS MONEY AND WANTS TO SPEND IT -OR A VERY QUALIFIED CANDIDATE YOU SHOULD BE PREPARED,WHEN THE BUYER WALKS AWAY EVERYONE LOSES.ESPECIALLY THE LENDERS WHO NEED TO RECOVER SOME $$$$,EVERYTIME YOU CALL THEM YOU HAVE TO GO THROUGH 4-5 PEOPLE TO GET ANYONE TO HELP YOU ,THEN YOU GET VOICEMAIL,YOU LEAVE SEVERAL MESSAGES AND NO LUCK.RESTRUCTURE OF THEIR SYSTEM SOUNDS GOOD!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! MY CLIENT IS ACCEPTING PROPERTY AS IS AND IS PAYING CASH.

I have seen the lenders move up the percentage scale of what they will accept as a final offer. Last fall a 65% to 70% of present market value would make a deal. My most recent deal was a listed price of $192,000. I presented my buyer's offer at $178,000 (that high price becaus we wanted to make sure the bank accepted.) To the listing agent's and my surprise, the lender hired an appraiser and countered at the full appraised price. What is the sense of going the short sale direction if the lender is countering at full market price. We got the deal at $188,000 and both agents had to give up a point to make the deal happen.

Speaking of giving up a commision, I have heard so many agents complain that they had to give up commission to keep the deal together, I have changed how I do a short sale with buyers. I tell the buyers up front all the problems with attempting to buy a short sale property. If they find the home they have to have and it is a short sale, I tell them up front that during the negotiating process, I will NOT sacrifice my commission on a short sale. I explain that they have to be prepared to walk from the deal if the lender begins to squeeze me or come up with the extra money in the counter offer. Since then I have not had to show any short sale properties.

Rick Frissell

Get rid of Short sales all together. ITS EITHER A FORECLOSURE OR NOTHING AT ALL!

JUN

2008

We are "selling" one right now. Our seller owes $950,000 and we have an offer on the table at $925,000 (cash). Do you think the bank cares? Of course not. We told the bank that this has to be done quick, close in under 30 days. Their response..."call us back in 72 hours because it will take that long to get to your offer". This is the only offer we've had on this house in nearly a year of listing it. I guess we'll say by to this offer and let the bank have the house because I think that's what they want.

Love the toilet Mike!!! Fortunately there are a few banks that are easy to deal with but yes I do understand your frustration.

JUN

2008

Hey Guys, And Gals....from the comments to the emails, and even a few phone calls, I am glad for the responce I am putting in very busy days right now and cannot commit to answering every comment, but I am impressed with the outpouring of support...

If everyone called thier board and asked for changes....it could happen

Mike: I agree with aout 50% of your sentiment, but find it a little short sighted. As you know, we as Realtors are usually trying to gain referrals. Those are gained through people we help. Short sales are a part of that. We have to remember we don't work for the bank , we work for those distressed sellers. When the property becomes an REO, THEN we work for the banks. Short sales need Realtors to take charge and realize that we can gain a client that may not pay off today, but by doing all we can to help them not damage their credit with a foreclosure, we will gain a referral base for LIFE. Short sale listings are necessary to help people negotiate Deed in Lieu. Banks require these properties be listed. So why aren't we trying to help people with Deed in Lieu's. Oh, that's right, we don't get an immediate payday. If you don't want the headache, don't take the listings. I'll be happy to counsel these families and take the referrals that will eventually come.

I think we can slap the banks in the face by doing our jobs with short sales. Submitting one, and only contract can dramatically decrease response time. Countering if you get a lowball offer you KNOW the bank won't accept on your short sale listing. We know how to do these things on normal sales, but we lose all knowledge when it comes to short sales. We need to take back what power we do have.

Chris...I have been involved with over 100 short sales...I never found one yet that the sellers had credit left to save...Once it hits liz pendense, it is a foreclosure action, thier credit is already crap

As for Refferrals I have plenty of refferrals I don't work for distressed sellers, I work for buyers and investors.So my refferrals are continuing to come from my past customers, who are investors and ready to go buyers... As for saving these poor people that have not paid their morgage in between 6 to 15 months, and have no money saved to move onto another home or lease options, I have less sympathy than you might think.

As for saying we don't work for the bank, well I have issiue with that as well. Try taking credit apps from any of your distressed sellers to the bank....You will get blown out in a New York second..If you want the truth, these distressed sellers are soming to my buyers and investors because we WILL take them in on lease options and owner financing contracts...

Of the amount of short sales I was involved with, the majority of them eventually went bankrupt and put the process off a few more months, up to six or more...and then left the homes after NOT paying anything for over a year.....These homes did foreclose, and went back to the bank...Over and over and over....

ALso as a person working with many investors, I see the flip side of this foreclosure mess. I work with actual home owners that have multiple homes in owner financing that are faced with a mess from their tennants not paying and fighting foreclosure, while the investor is faced with coming up with paying the bill out of pocket or playing hardball...or being foreclosed on themselves.

As far as Realtors gaining a client that will not pay off today, give me a break. Why, if you only had twenty of these deals you could lose your own house.....If you really want to help the economy, then work with homeowners who need to sell, and are not in foreclosure...They need your help. Or buy homes that are ready to go in any event, REO or what ever..

The only people who are making money in short sales are the ones who are charging for it, and the ones who can actually afford to catch the bank needing to clear their balance sheet and buy a really undervalued bargin...They then turn a very nice profit turning these homes ...either in owner finance or lease option...

I just put in a bid for 14 brand new homes at 85,000 apiece...I will not fight with foreclosures when these types of deals are available....We have another bid in for over 42 new homes for less than that, all in the Leheigh area in Fla... ANother bid is for some 70+ homes in another area that a lender is taking back from a builder...When I volunteer my time now its truely volunteering, not to be confused with when I claim to be working...

If you truely want to work with people, find the buyers trying so hard to get into a home in this credit crunch market...You will find many of them will find themselves in lease options with me or my kind.

Living and surviving to fight another day , in fact surviving to enjoy another day is why I get up and go to work. My time, like many of those who responded here, is valuable and needs to be spent where we can make a living and pay our own bills. If we all go broke, then what is left..

I have been broke, I have been foreclosed on, I have been evicted... My choices in life now are keeping me out of this situation, I have no intention of going backwards again by choice ...Thats how I intend to take back and keep my power from the banks...

Thanks for commenting, but I really hope you don't take your own advice

We have spent a lot of time on short sales too. Many buyers contact us about seeing them. I let them know that the majority of them are out there with a price that will not be accepted by the bank, and that it could take them 7 to 8 weeks to get a no or a realistic price. However they get a lot of press and divert attention from homes that are well priced in the marketplace.

They have definitely created a new niche market. I have not had the pleasure? of doing one myself. We just don't have that many in the active adult communities, like Sun City Grand, that I work in. But I do know someone in our office who sells outside the walls and is doing pretty well with these short sales. He has the patience of Job.

Short Sales will come and go but Realtors will always prosper, that is if we evolve.

Take care!

RJH

I want to commend all of those who are doing well with short sales...some people have the patience and contacts, and staff to get these deals done...I have looked at the profiles and websites of most of the commentors here that say they are doing well with short sales.....I will give credit where credit is due, I would send my stuff to them for a refferral fee...

I will let this post go after today, apparently there are just too many emotional feelings attatched to the foreclosure/ short sale situation. I went thru it, I cannot spend my days in it any more...

C ya on another post

I agree that short sales should be stopped. I had one bank that told the seller that they would not do the short sale due to her not living in the property.

JUN

2008

It would seem that their has to be a more efficent way than we have now.

An alternative to quiting is to mark and identify banks & mortgage companies that play nice and those who do not. A national database with one entity in control. Explain to each mortgage lender why it is in their best interest to go on the nice list, not the naught list.

That would mean that REALTORS actually work together. (Doubtful!) I am not sure where you get the idea a REALTOR must be involved in a short sale in order for the short sale to happen. They will go on with or without you.

We have a short sale on going (and going and going...) since January. And we have had and still have several buyers interested and actually offering more than the Bank approved amount. The current contract in the bank is also a cash deal, buyers are ready to close immediately. However their 48-72 hrs turned into ... well a month now, and soon these buyers will have to go find another house. We already lost buyers with this one once (also cash). This particular bank is so inundated with short sales that they are having extremely hard time keeping things in order. Oh and the bank stopped the foreclosure sale, trying to work on this, but at this point after pulling our hair out for months, we don't know what to think. We have 3 people working on short sales and like said before, sometimes things are easy and sometimes not (more often the case). We also have had several buyers placing offers on short sales but as of now, none of them could wait as long as the process it taking (for most of the deals we have seen here in CO). ~Rita

JUN

2008

Taylor-Brown...I have heard that as well...ALso have seen insurance canceled for having it sit vacant for more than 60 days...

Patty & Scott..I think there is a more efficient way, but many lenders apparently are not using it. Or allowing us to use it.....Best wishes

James.....a naughty and nice list...this is the comment I may have been waiting for...Gold star for you!! Seriously, that is so simple, it could work

I've actually had a lot of success and closed the majority of the short sales (on the buyer's side) I've worked on.....BUT I'll be the first to say that there has to be a more efficient way for the bank to work the short sale process. I would hands down rather represent a buyer looking at REOs instead of short sale homes.

Logan Utah Homes

JUN

2008

Thank you Mike,

I am not sure of the practical applications of my idea, however it is a thought.

Mike - Tried to send you an email - Earthlink didn't work

Drop me a line at Mike@PatagoniaFinance.com

There is a cottage industry springing up to negotiate with the banks and help resolve short sales. I find them very useful and worth every dollar spent. Recently they negotated a successful short sale for my clients - got me 6% minus about 1/2 pt for them and they did all the work from meeting with the sellers to get their paperwork together and dealing with both loans. If only the agent on the other side would have been able to keep her people calm and explained to them that a short sale really is a LONG SALE for the buyer it would have been relatively pain free. It is a part of our business that this market climate is producing and we have the choice to take the business or not. We do have all the control.

JUN

2008

Kaleb...Glad you have done ok on short sales..I jumped in on the listing agent side and had nearly 30 listings before I could realize what had happened..The ease of getting short sale listings was surprising to me...but the time they began to take increased disproportionately to the results. Soon I had 70 files working as I began to work with investors with multiple properties....We did have a few assistants in the office making the 1 million phone calls and faxes to keep this machine going...Maybe our short sales were different than some, but the numbers kept increasing in the favor of the banks by the week..By the same token, investors I was dealing with could get to the front of the line by dealing with bank REOs, it didn't take me long to see that since I only got paid on closings, and having a house, kids, grandkids, etc,... I chose to take the route that paid my bills...I love all the posts here that talks about our "obligation" to the distressed sellers...With a fulll plate of nothing but distressed sellers, and banks unwilling to actually work with our buyers, I kicked short sales to the curb........

I am beginning to look back at the situation again, maybe with a different program I could see getting back in...But like a diet of all chocolate, all that sweetness can become to much to handle after a while...I have discussed buying into a business that claims to have a handle on the business, and even they can only claim to actually close about 30%.....but they charge for 100%...The capitolist in me likes those numbers, if the agents and their clients can live with it, so can I.

What was the question>><????????????

Mike..I will check back with you soon...We just had our office and home computers completely revamped over the weekend to a different system, and some disruptions did occur...I hope everything is up and running now..

Right on! In Orlando we're all having the same thoughts, such a time waster. Buyers always seem to pick out all the short sales each time since the prices are usually artifically low. I had decided not to show short sales, but they always seem to come around. I think 20% is a high percentage. I believe it's probably more like 5-10%.

Very good point! It isn't funny that I'm working a short sale with a buyer right now. I've just had to sign a commission waiver on a deal I've busted my arse on!

Lyn - Could you define "commission waiver"? If that means you're not getting a commission, your response should be "Absolutely not!" and nothing short of that.

Scott, this post has reminded me more than once how local Real Estate is....I was just on the phone again with a head honcho of a loss mitigation company that is having a heck of a time getting thier short sales done...

Lyn....I ove working for //// who knows how much....my contact at the loss mitigation company says it will get better, as soon as the banks figure out a way to make money off the short sales

JUN

2008

Joanie in Vegas.....

I have a great amount of success in selling and getting my short sales approved. We all have to remember that the banks are back logged and short staffed. No one saw this coming especially the banks. If you are polite and strike up a positive and personal relationship with the loss mitigation negotiations believe me they will work on your files first and want to make the deal happen. I am polite and positive when I speak with them and I am always telling them that I know they are slammed and I appreciate any communication I can get from them.... I CLOSE MY DEALS!

Joanie in Vegas.....I have a great amount of success in selling and getting my short sales approved. We all have to remember that the banks are back logged and short staffed. No one saw this coming especially the banks. If you are polite and strike up a positive and personal relationship with the loss mitigation negotiations believe me they will work on your files first and want to make the deal happen. I am polite and positive when I speak with them and I am always telling them that I know they are slammed and I appreciate any communication I can get from them.... I CLOSE MY DEALS!

JUN

2008

Wow, you sure hit a nerve. Ok, first, the short sales are tough on everyone. When I have buyers I do everything I can to educate my buyers at ALL costs. Unfortuneately those FAKE low listing price where they can get so much more for their money, keep them asking and wanting to see them.

I have seen good listing agents that area able to work with the banks though. It is almost a game. The bank is overwhelmed and back logged but if you are nice and keep following up, then I think you can get it done.

THE WORST THING I am finding is these out of area agents that are throwing short sales up and then never calling back when I inquire. People are trying to do the short sale because they DO NOT want to go to foreclosure. But, an uncooperative or unresponsive agent will let it happen anyway. So sad.

They do need to be in a different category or something though!

Something to ponder: Six years ago, just prior to the Banks waging their war to become R.E. Brokers, Short Sales were done quickly and at a reasonable margin. REO was the choice of last resort. Now, REO as first choice, seems like a strategy to me. Build a large inventory, Dole out the listings at a discounted commission vs quantity, give incentives to sell it. Bait & hook...Once the fish gather in pools, competing for the premium buyer commission -- yank the line, lower commmissions, and reel em' in. so, if it walks like a duck...Banks as R.E. Brokers.

I've specialized in preforeclosure (short Sales) for over six years. Lately, I'm once again encountering Seller's with true hardships. These are the people short sales were designed to help. Just because the Banks are making short sales a nightmare, perhaps, for their own gain, we as professionals should stand our ground and protect the distressed home owner and protect our future.

Some suggested resolutions:

Implement guidelines for agents (Agents that have not successfuly completed a short sale transaction prior to 2005 would be practicing out of their area of expertise).

Require Brokers to attend in-depth foreclosure classes (instead of encouraging agents' discrimination of short sale properties).

Require Agents to attend in-depth foreclosure classes and obtain certification prior to representing a seller in foreclosure.

Some regulatory agency enforcement of Banks' maximum response time to an inquiry by the borrower (short sale submission). Increase of staff mandate for compliance.

Short sales are complex and requires more than the learing of the submission process. I have years of experience but In this market, I had to learn different strategies to overcome the new hurdles.

We may have won the battle against the Banks' fight to gain control of our Trillion Dollar Industry, but if you look beyond the commissions you might see that the War has only just begun.

I take pride in my profession and utilize my expertise to provide distressed home owners with the highest level of representation. And yes, I am currently successful in short Sale transactions with 30-day response times.

Ok, I see some responces are beginning to get solution orientated....keep it up...Maybe there is an answer in here somewhere

I agree 1000%. Short sales should be banned period, by the banks and NAR. They mean nothing when it's comes to a person's credit...if your credit is screwed up it's screwed up. They are a complete waste of time. I work the Vegas Metro and DC Metro areas and the same problems exist with real estate agents not knowing what one is or how to do one, the banks taking too long to approve one, and the new trend of listing the price so low it's deceiving, making a buyer think that the bank would even consider that low of a price just to get offers and buyers into a bidding war...this is a complete abuse of the short sale system...a short sale is not an auction.

BANK NEED TO GET THERE SHIT TOGETHER. WHEN A HOME GOES INTO FORCLOSURE THEY SOULD HAVE A SHORT SALE PROTOCALL IN PLACE. WHEN OFFERS COME IN WE CAN GET A QUICK RESPONCE AND MOVE ON. ALSO LOCAL ASSOCIATIONS MAKE US PUT THE HOME IN CONTINGENCY. THAT MEENS OFF THE MARKET FOR MONTH'S. THER IS SO MUCH THAT COULD BE DONE TO MAKE SHORT SALES WORK BUT NOBODY IS CO-OPPERATING

I have a question.

When did a "short sale" become a foreclosure? They are 2 entirely differnet animals in our business world. As for the lenders being the problem in the scenario you are also off target. The mortgage servicing companies did not force a sngle homeowner to buy that house, then run up their credit cards and buy SUV and boats.

I think that as a real estate agent you have found tht truthfully it takes hard work to survive a sales cycle. Your post is muddled with a mixture of anger and two separate issues woth REO and Short Sales and then fails to consider that when homeowners need trained professionals most is when times are at their toughest.

Wow , scary how many people involved in the sale of real estate have no clue what day it is...There are no "RULES" in short sales...with 90% of the real estate agents claiming they are doing a "short sale", it has become a "scam" where the agents have no clue if the lender will accept an offer, or is in a capital position to "take" a short sale even if it made sense. The desperation that is being presented by agents to latch onto any possible sale is making a big mess here in florida. The market is fine, except that one too many agents who should be bagging at walmart are still trying to sell the same olde stale bread and are upset that everyone else is not playing along anymore. Grow up and start working as oppossed to talking. Do any agents even bother to see what the financial position of the lender is before taking on a listing that might be a short sale??? Ofcourse not...just get ink to paper and figure it out later, then complain when it is not handed to you on a silver platter...get to work. And please take a moment to qualify the bafoons making offers today...fools making 50 offers at 40% of loan who don't have enough money to fill up the tank in the SUV are going to clog up the works. Time to find real buyers who qualify and not take the time to waste with people wanting to win the lottery instead of working for a living. Don't "pray on it", get your head out of the oven and get to work.

Amen on your thoughts about short sales. The sad part is that buyers are so ill prepared for the hassle of a short sale and don't understand that they wont get a response in a day/week/month. Even when you coach them, they keep clinging to the idea that their offer is the one that will make someone at the bank pay attention. I am also finding agents have no idea how to handle multiple offers on a short sale. I believe that at the very least, NAR should get their publicity team behind a media campaing to shed some light on short sales so buyers are better prepared. It would help bolster future arguments to keep banks out of the RE business becuase of the inability to act in a timely manner.

smileys Mike: While I agree that dealing with short sales is an exercise in frustration, as a listing agent and as a buyer's agent, I don't agree that they should be "banned" by NAR. Homeowners who are upside down on their home mortgage should have the right to make a deal with the bank and avoid foreclosure if they can. If the bank can walk away with more money than they would by foreclosing and the homeowner can avoid foreclosure (minimizing the damage to their credit), then it can be a win - win.

First of all, we don't work for the bank in a short sale, we work for our buyer or seller client. Secondly, if we don't help homeowners who are in trouble then they will be left at the mercy of investors who are already contacting homeowners to "represent" them in their short sale...even though they are actually representing their own best interests in the purchase of their property.

It seems that you are more concerned with the time you have to spend on a short sale than with the best interests of your clients. If you don't want to list or sell short sales then don't do it...the rest of us who are just trying to survive in the current real estate market will do what it takes to get the job done.

When the going gets tough...the tough get going!

EDITED: I agree 1000%. Short sales should be banned period, by the banks and NAR. They mean nothing when it comes to a person's credit...if your credit is screwed up, it's screwed up. They are a complete waste of time. I work the Vegas Metro and DC Metro areas and the same problems exist with real estate agents not knowing what one is or how to do one, the banks taking too long to approve one, and the new trend of listing the price so low it's deceiving, making a buyer think that the bank would even consider that low of a price just to get offers and buyers into a bidding war...this is a complete abuse of the short sale system...a short sale is not a reserve auction. It is also causing sellers not in a short-sale or pending-foreclosure situation to not be able to sell their homes quicker. Short sales and foreclosures are devastating property values nationwide. Our Las Vegas buyer just received an appraisal on a bank-owned property she is purchasing and the appraiser's comments were, "Prior transfers of the subject and comps #2 and #3 were to trustees deeds. These types of transfers are becoming common and when resold they are typically priced for quick sale, which is effecting market values in the areas. This forces homeowners and builders to drop the price to compete for the few buyers in the market. ... The use of bank sales was unavoidable as they are currently driving the subject's market area." Possible solution: Keep property value and equity in tact by eliminating short sales and possibly foreclosures/bank-owned by adjusting/re-adjusting loans for lower payments. Obviously easier said than done and too little too late. Otherwise, property owners are in trouble and eventually all real estate will be worth 0, except, of course, in those areas where "the powers that be" reside....believe me, their property values are in tact.

I appreciate the post but I must really be in the minority. The short sales that I have been involved with have gone very smoothly and with no delays or complications.

On the other hand foreclosures have been the night-mere. Our office recetly had a cash foreclosure that took over 4 moinths to close and the foreclosure companies who (nicely pick and chose who they want to get the listings) have the agentsjump through hoops to get THEIR jobs done, and if they don't jump through hoops they could receive a nice big bill instead of a tiny commission check.

It is funny how the penalties add up to more than the commission checks.

As you can see by my comments I rarely choose to sell foreclosures. My time is just to valuable.

The agent with the 4 month cash foreclosurenight-mare ended up makeing a decision NOT to attend closings ( since the buck was passed and she ended up paying fees that were not her responsibility) and couldn't decide how to spend her $100 commission check

I agree with your frustrations. You have every right to decline short sale listings and to tell your buyers that you will not represent them on a short sale and why. However, if NAR ever tries to tell me what I can and cannot sell ......I'll go to the DOJ myself.

I've not had time to read this whole string...but I certainly have had JUST ENOUGH of a taste of dealing with short sales to have formed an opinion. Every attorney I've spoken with tells me the odds of a home closing from a short sale range from about 10% up to about 50% (and that's being generous...and ONLY because there are that precious few banks who HAVE gotten their act together and recognize it makes sense to work with a ready, willing an able buyer to keep a house from going onto their books in foreclosure.

I don't now whether NAR has any jursidiction over this...but I certainly think the MLSs should. How is it that agents are able to place homes in MLS that are not being offered by sellers who actually have the ability to close the transaction! And they put them on the market at wholly unrealistic prices. Thanks to IDX, etc., buyers are aware those homes are "listed" and think they really have a shot at getting them, and as much as I try to explain to them how the odds are stacked against them, that we have no control over the timing that bank takes to DECIDE whether to approve a short sale or not..let alone to approve the terms agreed to in the sales contract, there are some zealous buyers who say "no problem" (when because of the dictates of their situations I know there is a big problem), I find myself getting trapped. Heck, I have one guy who INSISTED after much discussion on putting a backup offer on a short sale (bank currently is "reviewing" an accepted contract, and has not responded to the initial contract). Why? Because the price of the house offered in MLS is SO LOW for such a high quality house that nothing else on the market can possibly compete. I did not want to show the home in the first place because of the inherent risks, but the buyer insisted because it looked "too good to be true". I even tried to tell him IT WAS!!!

There should REALISTICALLY be a requirement in MLS that a seller is qualified to sell a property (ready, willing, and ABLE!!!!) before the property may be listed in MLS! Please don't get me wrong...I DO feel for all those families who have found themselves it untenable situations and are trying to find a way out. I simply don't want to be one of the bodies that gets trampled on in their efforts to do so.

Judi, boy I sure agree with what you are saying. It just is unfair across the board..

Even if I was fortunate for the short sales to go smoothly- that was the ONLY positive. I was making a caomparison eith foreclosures.

Who would ever think that short sales could ever have anything positive attached to it?

I am sure we all appreciate how short sales drag down the market for the rest of the houses in the area.

iT IS A BAD SCENE NO MATTER WHAT ANGLE YOU SEE IT FROM

I agree whole-heartedly with the commentary that agents who have no experience or interest in learning the process of short sales SHOULD NOT list these properties. We have had several closings involving short sales which have progressed smoothly towards closing. We even got paid our full commissions! However, the absolute glut of listings in our local MLS with the phrasing, "3rd party approval required" makes us wonder if all these listing agents really have a handle on what they're doing.

Recently we submitted an offer on a short sale and the listing agent informed us that the lien holder had requested forebearance from the sellers. Clearly, this property should not have been listed as a short sale. Needless to say, we are still waiting on a response to our offer from the lien holder...of course, it is the decision of our buyer to determine whether or not he is willing to wait on an answer or move on to another property.

From our perspective, short sales will be an ongoing problem for all parties involved until a somewhat universal process of working them is established. Realistically though, this probably won't happen anytime soon.

But the idea of throwing the baby out with the bathwater seems quite short-sighted. As professionals, our focus must be quality customer service. By denying sellers the ability to short-sell their properties, it would appear that our focus would shift from customer service to our own wallets and financial bottom line.

We must remember that a short sale is neither illegal nor unethical. The NAR simply does not have the right to ban such sales. NAR's objective should be to educate its members and work to facilitate this emerging type of sale.

I really like the idea of Realtors aharing info . . . what about that naughty and nice list of lien holders that will work with us, and those who refuse? How about sharing contact info - direct phone numbers?

I do disagree with the comment that said this is all a big surprise to the banks and that's why they're understaffed. Short sales have been a part of our business here in Colorado for years. Before the rest of the nation joined us, our main difficulty was convincing banks located on the east or west coast that our property values are dropping, and if they foreclose they will lose far more.

BLAH, BLAH, BLAH,!!!!!!!!!!!!!!!!!!!!!!!! YOU REALTORS GET OVER PAID ANYWAY FOR WHAT YOU DO. I DON'T KNOW A REALTOR THAT WOULDN'T CUT THE THROAT OF ANOTHER REALTOR OR THEIR CLIENTS. A BIG PROBLEM WITH THE MORTGAGE CRISIS IS GREEDY REALTORS SETTING INFLATED SALES PRICES ON HOMES JUST TO DRIVE UP THEIR UNDESERVED COMMISSON CHECKS. I CAN'T WAIT UNTIL THE PROFESSION OF THE REALTOR IS CRUSHED. HARDLY ANYONE IS HAPPY WITH REALTORS DURING A BUYING OR SELLING PROCESS. STOP BEING A BABY. I THINK EVERY REALTOR SHOULD HOLD ATLEAST A BACHELOR DEGREE OR HIGHER. THE REALTOR WANTS TO HANDLE ONE'S BIGGEST TRANSACTION OF MOST PEOPLE'S LIVES AND MOST ARE DUMB AS A BAG OF HAIR. THE EXAM TO BECOME A REALTOR IS A JOKE. WISE UP CLIENTS!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Banning short sales would do a huge disservice to home sellers. We are all in this business to make money but ethically we are also here to do the best thing for our client. By saying screw it let the bank foreclose is not doing these sellers who desperately need our help any good. Yes it is unfortunate that they got themselves in the foreclosure situation but then again who's supprised with the predatory lending that went on.

Yes short sales are more work but it saves these people from having a foreclosure on their credit report and it saves them from the grief that comes with foreclosure. It is an awful process and takes its toll on these people I would never wish it on anyone and if a short sale is possible it is the Real Estate Agents duty to work with the bank to get it to go through. I see to many agents in this for the quick sales if something involves work then they bail but we are getting paid good commission from our clients and need to diligently work through all deals not just the easy ones.

I will not do short sales. I stay away from them because you have no control. You may wait a month on just an answer and if the answer is no the buyer gets upset with you. I have had nothing but misery from them. I have had them say no to as little as $1000 short. I once had a cash buyer and it went to the close date and they declined it. Short sales, YUK!

Oscar, didn't Sesame Street teach you not to type in ALL CAPS?

Mike, for political and liability reasons, NAR is not about to offer any official opinion on REALTORS doing short sales. However, your point is an excellent one - if many agents refused to handle short sales until lenders got their acts together, REOs might start realizing how short-sighted, lazy and obnoxious they have been in mishandling short sales.

HI Mike-

I TOTALLY disagree with the proposed ban against short sale - BUT I do think that only agents with EXPERIENCE should be allowed to list them. The problem is that any agent can list a short sale but most have no idea what to do once they get an offer. I live in California and we have an epidemic of short sales.

As a buyers agent I will only show a "short sale listing" after I have spoken to the listing agent. All you have to do is ask a few simple questions like: who is the bank, is there a first and a second, how long have they been in default, how long have they had the loan and what is the hardship. If they can not answer every single one of those questions I will not show the home. To me - most of the time the answers do not matter - it is just a sign of if the agent has any clue what they are doing. Everyone of those things should have been found out at the listing appointment.

I do not think that we should turn our backs on those in need of help. YES I agree that the banks do need to get with the program and hire more asset managers to handle the files - but on the other hand if agents knew how to package a short sale their jobs would be much easier, too!

I think that banning short sales in the long run would hurt the sellers not the banks- more investors would try to take advantage of the home owners. Face it - if NAR bans short sales there will always be someone to come in and do the work. So my personal belief that banning short sales will NOT hurt the bank - other companies will come in and do them so the banks will still get their money - but it will be a hardship for all of us who have taken the time and expense on how to do a short sale correctly.

I am also an REO agent - and to be honest I thought they would be easier then short sales- but no matter how you look at it we are dealing with "faceless people at the bank" they do things on their time schedule.

No one is making you show or list short sales - if you dont want to show them .. then DON'T SHOW THEM ... but no one said being a real estate agent is supposed to be easy. We are all licensed professional who have the choice of who we work with. We do not have to take short sale listings and we do not have to show them. Tell your clients you do not work with homes in pre foreclosure and more on. You may loose a client - but then again you may not.

I would say that most of the short sales not being accepted is because of the unrealistic sales price. Just because the banks screwed up and gave loans to many people who should never have been in the loan to begin with does not mean they need to discount the house and additional 50% of CURRENT market value to unload the home.

Just because you submit and offer does not mean it should be accepted. You know your market place - if the offer you are submitting is something that YOU would not accept as a home owner ... then DONT think for a minute that the bank is going to accept it. Leave the crazy 50% under current market values offers to the investors who spend $3000 on some guru course and think they know it all! Leave the real SALES to the agent with the time, experience and compasion for the sellers to get the short sales done.

Maybe NAR can lobby that banks are required to put a percentage of market value that would be the lowest they would accept on all mortgages in their by-laws or something. That way, we could check with any loan officer with the bank and would know right away whether we are wasting are time or not. It would also help if they were required to provide a directory to the local real estate commission of the loan mitigation officer's name and telephone number. It won't force a call back any sooner, but we wouldn't get the run around, either.

I do agree with Cheryl. One of the things to keep in mind, is that many agents dont mind the extra work, as they see the long term returns with client loyalty, etc. If one of your past clients calls you becuase they are in trouble and need to sell, are you not going to help them if it's a short sale?

I avoid short sales myself, but never refuse if it's a past client, or referral. trust me, there are plenty of other agents who will do the work that you daren't crazy about.

I turned down an opportunity to list a huge portion of a major lender's foreclosures. Why? It's not how I want to run my business or the kinds of properties that I want to retool my business for. I'm too busy with more profitable business and my time is my own. That's the beauty of our industry. You always have the choice to focus on the business sources that you want to focus on. NAR is not going to ban any source of business for it's members, nor could they for some very good and serious legal reasons as well.

I do agree that the banks jsut don;t get it, when they won't answer and offer for 6 weeks. So, move your buyer to another property. Sooner or later, markets fix these sorts of things.

In the meantime, best of luck for the rest of '08 and find the lower hanging fruit.

Yes, short sales are a pain in the *&#, but right now, they are what they are, and, unfortunately, a large part of the business out there right now. I have represented both buyers and sellers, had success and failure, each time have had a different experience and outcome, and always learn something new. I just had a short sale close after my buyer and family had lived in a hotel for a month! I will continue to work with short sales, but am very upfront with my clients about what they are getting into. If I can help someone avoid a foreclosure, that's wonderful, but I will not pour money into advertising, and all will be aware of the risks, etc. When I have a buyer who's interested in purchasing a short sale, unless they have time, patience, fortitude, and can deal with the possibility that they will not end up with the house, I discourage them. If they have all that, and are successful, they can end up with a great deal.

I could not agree more, as a matter of fact, my office Manager is now advising us to stay away from this rock bottum real estate market, its got half the office on the run and the money is just not coming in, the buyers are walking and the banks are offering less and less. when the money dose come in, your lucky if you brake even. YOU CAN BRAKE EVEN SITTING ON YOUR BUTT AT HOME WITH YOUR FAMILY!

In Washington, a new law has come into place that has everyone freaking out about "distressed homes". It changes all sorts of fiduciary duties and who works for how. In the end, I can be sued. The law is forcing agents to not want to work with a seller if they are even one month behind. CRAZY!

funny post.

Short sales are a giant pain... but if you know what you are doing the return should be More like 80% not 20.... still way more work than it should be the pay off is not as bad as you say.

I would say a lot of the problem is agents that dont have any specialized training trying to do them and "gumming up the works" at the banks and giving them a bad name on the market.

Short sales are time consuming bu, I do have a 95% success rate and th 20% is in accurate. If you actually take the time to work a short sale they are not that bad. I do agree with you in regards to the banks not having any respect for Realtors. They feel we are over paid. Sad since with out us they would be losing even more.

FYI ... for all those of you who think a short sale is better for a client's credit than a foreclosure ... you're wrong. A short sale is viewed EXACTLY THE SAME as a foreclosure by all lending institutions, and will affect a borrower for years to come. Either way, the seller loses, but then again, they are the ones who accepted the loan terms and didn't make their payments.

I was a realtor for many years before focusing on the lending side and understand what you're going through. You have choices to make, in who you deal with, and what part of the market you want to focus on.

There is a definite market for short sales, mostly to help the buyer, as the seller won't get anything anyway, whether they sell it before being foreclosed on, or after. Seller's credit is still screwed for a period of time. The benefit is for the buyer who manages to get a home at a discount before REO, when everyone else knows about it.

Those of you that blame the banks should look at it from their perspective. The "loss mitigation" departments have to decide how much money the bank will LOSE, and tries to minimize that. It's about survival, and just adding more staff adds to the bleeding. None of us benefit when banks close down. Means less competition and more loan program restrictions for the rest of us.

What started this problem? GREED, on the side of the buyers. Having to borrow beyond their means without looking much beyond the closing date, let alone years down the line, on how they are going to pay their mortgages. Most of us live on credit and have jobs to pay the interest costs. We need to take a hard look at ourselves and spending habits.

If you don't like short sales ... then quit doing them and taking business from those that enjoy them and know what they are doing.

And ... STOP WHINING !! If you have nothing good to say about our industry and how everyone is trying to survive, banks included, then find another career that is better suited to you. I have found over the years that most who complain on a regular basis are just plain lazy or ignorant.

Bottom line ... use common sense. If it was your $200k or more tied up in a home and someone wanted to get away with paying you $150k ... wouldn't you take your time to make sure it was the best possible offer you could expect to receive?

The simple and most sensible answer to the problem: identify the property that is going to be listed for sale and notify the lender(s) BEFORE listing the property. Let the bank set the price based upon their BPOs, etc. By doing so we accomplish two things, (1) a no-haggle net price that we know the bank will accept, and (2) we avoid the typical "fishing expidition" for the appropriate price while we watch our clients slip closer and closer to foreclosure.

Short sales are time consuming but, I do have a 95% success rate and th 20% is in accurate. If you actually take the time to work a short sale they are not that bad. I do agree with you in regards to the banks not having any respect for Realtors. They feel we are over paid. Sad since with out us they would be losing even more.

As many have pointed out, listing homes at unreasonably low prices is hurting our industry. Banks need to approve short sale prices BEFORE troubled homes are listed, AND they need to make decisions fast. Otherwise, we shouldn't even offer the Short Sale as an option. Foreclose and move on. Banks are hurting too, they need to refocus their efforts and resources towards sorting out this mess, as I'm sure they are. I think we should disallow listing any home that doesn't have a genuine For Sale Price. We can't control the banks, but we do have a say in how our industry is run. I think this topic a great start to making that statement. Every Realtor Should Reply with at least yes or no.

Yes - Continue to allow short sale listings with Subject to prices.

No - Stop allowing short sale listings with subject to prices.

I agree with Eric Newman, I have done short sales for quite a while now and I have a 95% closing rate. You either like to negotiate these or you don't. I do and I do them myself I don't send them to a short sale negotiator. Banks are NOT going to give you a list price; they are NOT going to send someone out to do a BPO prior to an offer being made on the property and the reason for this is they do NOT want to put more money into a property that may NOT sell and end up in foreclosure or bankruptcy as they are already losing a great deal of money on the property. So if you do NOT know how to do a short sale DON'T DO THEM and leave them to the agents that want to do them and know how to. Those that are whinning about short sales aren't doing REO's either because they have to foot the bills for the power, water and garbage until the home closes and the bank decides to pay their bills. I don't think that the bank has disrespect for Realtors I think the banks are inundated with files and are overloaded and stressed out just like we are. So try giving them a break and being kind on the phone it goes a long way to getting what you need from them. Just my opinion.

I have found the banks to be completely ignorant of what it takes to sell a home these days.

We have had several short sales that had been fully submitted be either ignored by loss mitigators and their management or so over appraised that the bank had it's own model match listed at 30k less in the same tract.

The foreclose properties that we have worked on have never sold for more or even the same as we had offers with 2 exceptions: 1 I also had the buyer and spent 3 weeks and over 45 phone calls to track down the asset manager and 1 where Ocwen foreclosed in the middle of an escrow and the buyers agent tracked down the asset manager as soon as it foreclosed. Both of those sales netted the investor far less money because of costs of foreclosure, loss of interest income by delay in sale, asset management and increased commission.

Now, the banks are trying to interfere with short sale listing contracts interceding with their 3rd parties contacting clients after contracts are in place and submitted to the lenders. The 3rd parties are sendign letters and calling clients offering the same services and options as already presented to clients. Also, I am now seeing addendums to be signed to listing contracts interceding 3rd parties interference into the listing process with clients for the short sale. In one case, the addendum allows the client to cancel their listing contract at any time. (This allows the 3rd part to contact your clients, get them to cancel the contract with you and cut you completely out of the process leaving your client at the mercy of a 3rd party foreclosure service based out of a different tort defendant friendly state that could get your client to waive all their legal rights. And...when that happens you are still in the same state with your client who has been financially devastated and your brokerage looks like a deep pocket because you touched it.)

So, to balance the playing field, I think the local code inspectors should have a field day with the REO properties to help offset the losses created by the foreclosure of so many properties devastatiing property values.

Sure short sales are a pain, you are dealing with overworked hourly employees. That being said they are becoming more and more of our business and you have to keep up in order to serve your customers and clients.

There are perhaps two ways in which Realtors can waste less time and increase potential sales on the short sale listing. One: Get a pre-approval from the bank before you list the property. Inform the bank the seller will not sell unless the seller knows what price the bank will accept. Ask the seller to assist you with this. It did not work for me on my last short sale, but I know I would not have spent much time before deciding not to take the listing. Two: When you have an offer, and it is not a low ball offer (and you should know as a good realtor), mail a certified letter, and tell them you will sue them in smalls claims court ( for the commission), if they do not respond within 30 days to the offer. If we all do that, I bet they will finally get it.

Gloria said: If the banks could get their paperwork together before listing these properties, then MAYBE we could do our jobs.

Maybe I am misinterpretting Gloria's comment; but, banks don't list short sale properties. We do!

I am not an expert is short sales, by any stretch! But the hang-ups I have found are related to the type of loan, multiple loans on a property, mortgage insurance and another major reason - sellers not getting all their documents together in a timely fashion.

For my first short sale listing (and I had no idea what I was getting into), I had the property listed for three months before I had all the paperwork needed to submit to the lender. This was a company that would take the paperwork up front with out an offer. My loss mit contact told me they wanted the paperwork upfront, because sellers leave out bits and pieces of required information.

I have made a couple of rules for myself...

Prequalify the seller!! What is the hardship? How many lenders are involved? How many payments have they missed? How up-side-down are they? If there are multiple lenders, are they willing to sign a promissary note? Etc, etc, etc.
All paperwork must be completed prior to listing. (I use my own forms. The seller may have to fill out bank specific forms at a later date; but all the information has been compiled - especially the hardship letter.)

As several have said, these companies are overloaded, some play nice and some don't. But perhaps part of that is due to the volume of submissions that shouldn't have been submitted in the first place!

There is a lot of misinformation out there about short sales - among both real estate agents and consumers! Not every seller can or should be rescued by a short sale.

Just my couple of cents!

I feel for the collective few sellers that really need to depend on a short sale to work, illness, military relocations, job loss, divorce. What about trying to revamp the system so we dont put all these people into foreclosure.

I was formerly in appraisal and over the years we bucked doing certain things we thought either undignified or, for what ever other reason, not something we should be doing. There were things I would not do such as drive-by anything! Life is too short, and liability in our litigious society too great for me. On the short sale arena the same holds true. If the NAR steers clear of this avenue of the business, the fly-by-night, non-NAR individuals will fill the gaps, as long as the public believes they have an opportunity to gamble on a bargain. The same is true of the foreclosure business. It may be less than perfect, but the general public still wants to participate. If NAR members do not assist, others will fill the void. In both cases the likelihood is that ethics and rules will not be followed, and the general public will be left with a lower opinion of real estate agents. This group includes all of us. I think we are better served by the NAR adding structure and educational efforts to both fields and in so doing possibly we can make each process more systematic. In this way we also benefit in having the general public, and our clients, not only being served, but gaining confidence in our services.

I recently saw an unrelated blog about automation replacing agents. If we fail in meeting the specialized needs of our clients and the general public aren't we making this more likely or even hastening it?

Short sales are tough. But no one is forcing people to sell their homes. As for the contract dates being ignored, the short sale lender is A) not a party to the contract and B)wasn't consulted ahead of times in regards to setting up a realistic closing date.

During the high times if a lender tried to exercise caution because all the signs showed the buyer was getting in over his head, it was the real estate agents and builder reps that searched for another lender that would throw caution to the wind.

Short sales have always been around. The numbers just get bigger. In the early 90s, a short sale might be for only $5,000 to $25,000. Now they're in the 6 figures and up.

I do commiserate that it's very tough for you. A lot of the short sale staff is new, with little experience as the demand has become larger. However we saw the same thing on your end a few years ago, a high number of very inexperienced real estate agents who also didn't return phone calls and had poor follow up.

Stick with it though, this too shall pass.

best wishes,

You make some excellent points, but overall I would have to disagree with you. Letting it go to REOs is a bad idea. Short sales may be frustrating at times, but it just means we have to work harder for our money in this market.

PLEASE don't be angry for what I am about to share with you..

As many have previously posted..the problem IS with the lenders AND the agents.

Agents have no clue (99% of the time) how to get the short sale approved and closed. Its a process

that has to be learned. They ARE closing. Don't quote me on this but, 20% of the closings

nationwide in q4 of 07 were short sales.

There are many agents who are making a killing doing short sales. Proof?

2 of the top 20 Keller Williams Agents for commissions earned last month...in the nation...are doing nothing

but, short sales. One of the top 10 agents in Atlanta is doing 99% short sales. Short sales are something all

of us have to learn...at least for most markets.

Check this out.. Free 7 Part Agent Short Sale Secrets Crash Course, Instant Download.

I definetely agree, if you are going to be involved in either short sales or foreclosures, it is not for the novice. I took a course on short sales a while back from an instructor who was in title insurance. Opened up a whole new level of perspective, and I believe will be beneficial the next time I execute a short sale for a client.

Do you really think the banks are that ineffective?

When they were originating new loans, they basically needed all the same stuff (in reverse) to approve a loan that they need now to approve a short sale. There were more loans than there are short sales (although not many!) Sellers want them to be expedited, Agents and buyers want them to go quickly, the investors who these lenders dumped bad paper on want them to go away quickly, so who is the only party benefitting from the short sales not happening quickly? The lenders. They are in a position where the only way for them to stay in business is to try and drag these out hoping for magic answers. There will be no magic answers and many, many of these institutions will be unrecognizable or non existent within the next 2 or 3 years. it will all work itself out, eventually

Ah! A voice of reality! When agents stand up for their value and stop begging for pennies, the banks and their suppliers will have to be accountable for the messy, tedious work of cleaning up their own consequential greed. It is not agents who underwrote and approved loans or received the fees charged for risky borrowers. Agents clear an average of less than 3%. This is not a margin any small business can survive, much less grow, on. Professional One Real Estate says bring on the competition, be it banks, the internet, the do-it-yourself-consumer......valuable service is valuable service....no matter what the business. Fear not and hold on to your honor. The light of the truth always reveals the pureness of the heart.

1. I find it interesting that people are blaming the lenders. I suspect the lenders are slowing the process down on purpose and if they were not doing it with short sales they would be doing it with REOs. Right now according to FED data our major banks have to borrow money to meet reserve requirements. (think about that irony - they have to borrow money because they do not even have 10% of ours to stay in business.)

Wall Street traders are driving up the premiums on Merrill Lynch and even Goldman Sachs credit default swaps. (insurance against defaults on bonds) We have a serious liquidiy crisis and by slowly deflating the bubble our banks and financial institutions might not have to officially recognize they are broke.

2. I see agents bragging about short sales successes. The real question shoud be what percentage of the short sales are getting borrowers released from deficiencies. Did you know there is now a a market for these post short sale loans. According to a client of mine, there are guys giving seminars on how to buy these loans.

Just wait for collections to start on a large scale. The repercussions for the Real Estate brokerages will be enormous. If you are instructing your clients to sign the vague and sometimes misleading closing documents or telling your clients to close without having the paperwork reviewed by an attorney... the real estate business will be owned by the remaining banks by the end of the decade. Please be responsible and understand that a foreclosure helper - should be advising people they should examine other options.

80% of the people do not have to get hit with a foreclosure simply because their agent could not close the deal.

A bullseye. Well stated.

Many of you Realtors who are frustrated with Short Sales might consider a different option. Rather than looking at an exit strategy, how about attempting to help these homeowners keep their home? Of those who qualify for our services, we are able to help 98%. We have streamlined the process so that we only need to spend 30-60 minutes with the homeowner on the front side, then our experts at our corporate offices handle all of the negotiations on behalf of the homeowner. It's a win-win situation. The homeowner gets to keep the home, and we get paid well to do help them. You can earn $350-$2000 for an hour of your time.

As a Realtor or Loan Officer, you can add our services to your business, or just settle for a referral fee. Contact me for more info. I'll be glad to help. I am in and out of the office quite a bit, so leave a message or email me, I'll get back to you as quickly as possible.

We're here to help homeowners save their homes! Those who lose their homes to foreclosure or bankruptcy will be out of the home-buying market for quite some time due to the fact their credit is ruined. which hurts the Real Estate Industry. When you help to save the home, you help to save everyone...homeowners, banks, the economy, and other Professionals in the Real Estate Industry. I look forward to hearing from you!

Whoa - while I completely understand the frustration from the Realtors perspective there is both an economic need and a client benefit for short sales. Like it or not Realtors are a service business and part of the service is building long term relationships with clients. To simply say let the house go into foreclosure is short sited. There are other options that will help these clients and create a win win situation.

Perhaps a better option would be to find a non-realtor consultant that will work on the client's behalf to stop the foreclosure and work with the bank to explore all the loss mitigation options available. The real problem is that most agents are not experienced in navigating the ridiculous banking labyrinth. Why would you be? Stop looking at short sales as simply an income source and start finding access to soultions beyond that will help the client. By doing this you will stop wasting time and start building long term relationships that will pay off in the long run.

This post and the subsequent support for it deeply saddens me. There is a third option - a winning option for all involved!

Isn't the idea of the short sale to HELP the seller avoid foreclosure. I thought Realtors are here to help people? I have helped sellers avoid a blight on their credit due to a mistake they made. Yes it is tough but are Realtors tough enough to handle it? I guess would could just let the banks do our jobs and we could go work in a factory.

I agree with Tim Harris - eliminating short sales is NOT the answer. Most of my cleints are short sale listings, but I'm selling these properties -the problem comes in the training, not only of the listing agent, but with the buyer's agent and their clients.

I took Tim Harris' training 9 months ago and it was worth every penny.

Last - what about the client? Isn't this business a service based business? So, he service gets hard, and we don't care, don't want to work to help our clients. Shame on us if this is the case.

Susan Goulding
Keller Williams - Tracy/Mountain Houe, CA

The poster before Susan (looks like the name is "wrong idea" but it doesn't link) stated that the idea of the short sale is to help avoid foreclosure. In a sense, this is correct, but shouldn't an exit strategy be the last objective? The fist objective should be to save the home if possible. The problem, most Realtors dont' know they can make money saving the home, and since they think they can only make commissions selling the home, Short Sales are suggested as the first option rather than one of the last.

Now it's time for the tough question, the question that needs to be asked...If the person in need happened to be someone you cared about, such as a family member or best friend, I dare to say that everyone reading and posting on this thread would hope that someone would try to save the home first instead of trying to get them out of it. Am I right? Of course I am. Shouldn't every person out there be treated in the same manner? Ahhhh....but commissions get in the way.

We can solve that problem. YOU can get paid to help save the home...at worst, get a referral fee.

I feel like I am a codependent working with alcoholics. I seem to care more than the banks or the owners.

Short Sales are frustrating to no avail. We've been through enough to know do not waste your time. Thanks for a great post...you wrote what we were all thinking!

Cheron Lange

Yup....I think this topic has hit a nerve..keep on posting

Stupid question, maybe, but is a short sale is a better option today on a credit report than a foreclosure? If so, what law has been changed in the Fair Credit Reporting Act? I keep reading that agencies such as Fair-Isaacs might be more lenient, but haven't seen this happen yet.

Bad credit payments (over 30 days late) are reported for 7 years by law, right? Only a Bankruptcy stays on the report for 10 years, all other 'dings' stay for 7 years.

Just asking.

Mike,

We as real estate agents keep perpetuating this dilemma. When we do a BPO for a property going into foreclosure, we are all instructed to give equal weight or occasionally more weight to the listings in the market, because of the valuation declines. However we all see in the MLS unrealistic listing prices. This is all caused by we agents trying to get an offer on a home in a slow market. In most cases the bank is going to ignore such a ridiculous offer for purchase thus clogging the banks system even more. From my point of view it is up to Real Estate Agents to not list at these fallacy prices, lets clean up our own act first. Sometimes it is better to just walk away, for there is nothing that we can do for some wanta be sellers.

I would suggest that the MLS have a requirement that we comment in Public Remarks if this listing price was preapproved by the lender. If it is not preapproved, then we could inform our buyers of the possible delay involved with a short sale that still has to go through the lender approval process.

Enough of my ranting, you truly have struck a sensitive subject.

Really great and thought provoking topic!

As a Personal Mmortgage Consultant, this has a definite affect on me as well. I had a referral all me and ask to be Pre-approved even though they were shortselling, no matter the situation my fi st obligation is to my potential client and how I can help them and position them for future financing success, Reading this post makes me think different about the client. What a sense of entitlement! Let me take advantage of the bank, dump my home and buy another one. Based on their current income, they bought way over their head. Am I harsh to think some people (not necessarily the clients in this scenario) should own their situation, why should their debt be forgiven?

Now itspossible to go through a short sale and qualify for another purchase. It is not easy, the transactuion needs to happen in the just the right sitaution. The way the debt is resolved and recorded is hugely important.

Should it be harder too short sell or should it be eliminated?

-Sean

www.TheFriendlyNeighborhoodMortgageGuy.com

To ALL...thanks to all that have posted..I never dreamed this many people would comment...Had I chosen to comment back on all, I think I might have diluted the integrity of the post..I really do like the flow of comments, and the time that many have taken to express thier feelings in such detail.

This is the power of this forum, I am again in awe of this place......Thanks again

This has been a terrifc blog topic, and very interesting to see the responses. I agree with the responders on several points.

!st. We as agents contribute by taking over priced listings; under priciing short sales in hopes of getting an offer so you can submit your package.

2nd. Banks have hired under skilled people, not by design; no one planned for this volume, it was gravy days and Greenspan didn't sound his alarm bell like he should have. Banks are over run; under staffed and lack training programs to keep up with the volume. 1 employee can have 2000 files on their desk. How many of us would look competent keeping up with that?

3rd. Agents are infamous at least in my market for submitting incomplete contracts; thus their lack of attention to detail, skill or whatever is a contrribution factor to the banks thinking we are the problem; or that REO agents are the problem.

4th. Do banks need to have a better process? Yes. Do some short sellers just need to be told to suck it up? They defrauded the lender with a Liar loan and are surprised they can't afford it? Why do you think you had to lie in the first place? For those people that were truly misled and defrauded by their lender and or agent. They deserve everything we can do to provide our service and counsel.

5th. Do you think if we had our buyers ignor the listing price of a short sale if way under) and did an actual comparison of recently (less than 2-3 months) sold properties in the neighborhood and community that we could educate them that you can get a good deal, but good steals won't happen, it will just give the agent practice at writing worthless contracts (hopefully completed ones) and the buyer frustration and the sellers false hope on their way to foreclosure.

As agents, we have to ask ourselves why the percentage of expired listings are so high? do you thinks it's becasue all us mastered pricing? Are we part of the problem because we want sellers to like us, vs. just saying NO I am not the right agent for you because your not willing to sell where the market is? What would the Industry be like if we actually explained supply and demand; and gave sellers the ultimatum to get on the bus or enjoy living in your home! ( I know many agent do just that, it just not enough of us)

JUN

2008

Mike, thanks for the post. Seemed to call it like it is to me. Yes, most of us weren't trained to do these when getting our license and I know that some agents truly have been able to capitalize on it, really streamline it with the help of working relationships with local lenders. The asking prices of these seem to be phantom prices. Perhaps a better system can be developed...like lenders and their agents creating a rapid-response line to questions and keeping a shorter (2 days max) yes or no response to offers (all lien holders on same property should be in agreement regarding who gets what before the listing). NO EXCEPTIONS OR EXTENUATING CIRCUMSTANCES

I agree with JP, REALTOR, Las Vegas Metro & Washington, DC Metro...if banks would lower interest rates to help owners (even if it meant finding a new co-borrower to help with DTI issues) that could help neighborhoods retain retail home values. Think of it this way, it might be better to have the owner remain in the property if they would maintain the property condition instead of contributing to vacancy or blight issues. Otherwise, a new category for shortsales and REOs should be created in our MLS so our comparable report can extract more applicable data.

Keep sending in comments and suggestions from your short-sale stricken area.

Wow... hard to just try and stay on top of all the new posts on this...

Two things...

First, it is VERY clear from many of the comments here what I already know from my own market but is good to see it is not isolated... Agents HAVE NO IDEA WHAT IS INVOLVED IN A SHORT SALE! What some agents are suggesting here is crazy and will NEVER happen. Banks will not give you a 2 day answer or tell you up front what they will take so you can go get it... No more than a seller with a ton of equity will tell you "hey, I'll take less just go get me my min...." Just like underwriting a new loan there are steps to take on a short sale...

Second, Do agents that are taking short sale listings realize they may be in violation of the Code Of Ethics... I cant quote the article but the gist is ... Don't practice SPECIALIZED real estate WITHOUT the expertise and/or training needed!!! My experience is that easy 50% of agents taking short sale listings are in VIOLATION...

Think about it...

Mark

Thank you so much for your article! I personally have refused to go anywhere near a short sale. I won't do anybody's dirty work.

Not only is it the work involved, but here is an example of what a bank will do:

A real estate agent took a Buyer all over creation because the client wanted a short sale property. The client found a property that he wanted. Property was listed for $99,900 with the Buyer making an offer of $95,000. The bank came back with a counter-offer of $150,000.

Why was the property listed at $99,900? That is dishonest!

Peggy

More comments on a subject that is apparently a sore subject with many...I hope that of the over 3000 persons who clicked on this post came away with a diferent thought pattern... I had a vision of what I thought short sales were based on my personal experiences..

Over all, I still feel like the banks are taking advantage of us as Realtors and I feel that the Local MLS should have a category of just short sales, and that those properties should have some general guidelines that keep the playing field a bit more level...

Again, this is just a great forum, I hope that the readers of this post see the value of posting comments . All across the country we have seen a variety of viewpoints, they all have merit...Thanks again to all

While I agree that short sales can be a more painful process, I cannot and will not walk away from a distressed seller and say-sorry tough luck. These homeowners need our help. If we can negotiate the short sale with the lender the homeowner shows the lien satisfied on their credit report and will effect their score and buying ability for the next 12-24 months. If they are foreclosed upon-the effects are much greater and longer lasting.

That being said-handling short sales is not for every agent, just as brokering businesses or selling commercial is not for everyone. The agents who are listing short sales MUST be well educated in how to do them!!! This is part of the problem. The lenders are overwhelmed(we know that) and they will tell you flat out-if you submit a package that is sloppy and incomplete it will literally get thrown in the trash!!! No kidding. SO PLEASE if you are going to list them-make sure you know what you are doing or hook up with someone who can mentor you in this process!! These are peoples lives and credit we are dealing with-there are no do overs once the foreclosure is final.

For those of you who are working buyers and showing them short sale properties-PLEASE do everyone a favor and first educate yourself as to the process and certainly educate your buyer!! This will also enable you to spot the listing agent that has listed a short sale and has no clue as to how to proceed. Then you can decide to move on to another property or to assist that agent in "getting it right".

It's not the easy market that so many people jumped into a few years ago, now we have to really work again. Roll with it and if you don't want to do short sales-DON'T. But DO refer them to those of us who will deal with them. I know that every short sale that I get closed will make me that sellers hero and who do you think they will call when they buy again in a yr or two? Who do you think they will refer their friends to?

Some of the lenders are getting better with short sales. I heard just yesterday that WAMU had responded to an offer in 30 days(THAT's GREAT!!) and they were closing the following week. So let's stop bellyaching that it's hard and frustrating and put our energy into getting the job done for the sake of our clients. There will be no "easy button" in the real estate market again for a long time.

Best wishes to all of you who get up everyday and work this challenging market!!!

I totally agree with you! I had a foreclosure personally and bank sat on their duff with a cash offer for $155,000 and now they can not even get $130,000! Too many agents are throwing ridiculous prices out there. They should be required to have bank approval for that listing price if it is a short sale.

Chris Webster

As much as I also hate the amount of time wasted by Countrywide, forcing the bank to turn short-sales into full foreclosures won't help the sellers at all. The short-sales I have done haven't been just to make a commission, they have also been to try to rescue peoples credit. A short sale is a heck of a lot less damaging to a clients credit than a foreclosure is. Once they are back on solid footing, I hope to be able to them find something within their means. I agree that the banks should be forced to simplify this process, but I don't think that just foreclosing, instead of attempting an exit strategy is the answer.

More extensive comments..it continues to amaze me..just shows how this market is affecting so many . so very many

Thanks Chuck!! Let's keep our client's best interest in mind!! As they say " the road less travelled........"

Yeah...thanks Chuck...If we all spend all our time working foreclosures that waste our time over 80% of the time, then that means the majority of the Realtors will be losing thier homes as well ...I feel for the roughly 20% of the sellers who are truely caught in this problem thru no fault of thier own, but thier credit is already ruined for a while. They need help getting into lease options by saving thier money for the last six months to have cash for a down payment.

But so many of the sellers I found paid no payments, and saved no money toward getting another place...I saw this over and over....I finally had to quit because it was to hard on my mental well being...ANd it wasn't paying my bills unless I could find an investor to buy the home, but the banks wouldn't make the sales happen...So moving over to REOs was the way to make the income come into my house...I can tell you my first priority is to pay my own bills, I can tell from the over 160 responces above that many Realtors from arund the country fell the same way....Its a dreadful situatin, but we have a responcibility to get our bills paid, to stay out of foreclosures our self...

There is more to Real Estate than playing this game with a stacked deck....

JUN

2008

Back in my Realtor days, the main problem was that most agents really don't know how to do a short sale in the first place. Short sales are very simple, especially if there is more than one lean holder.

Now I know a lot of people are going to be upset with this post but the truth is the truth. I closed 30-40 short sales in about 6 months. If you know what you're doing, you can get the job done and for those of you who are crying and complaining like the poster here, there's something you're not doing right!

You can hate me all you want but you can't argue with success.

Here are a few tips for you:

1. Don't wait for the bank to respond to everything. Be proactive! Don't wait for the bank to tell you what you can price a home at.

2. Start your listing price at what the around the low end of the comps, then deduct for any repairs needed to the property.

3. Then drop the sales price by $10,000 a week until you start getting offers.

4. You will probably create a bidding war but that's ok, now you have several offers to present to the bank. And this also quickly establishes the true market value for the property. (DON'T WASTE YOUR TIME GOING BACK & FORTH WITH THE BANK ON VALUE)

5. Now, get those offers to the bank. They now have a decision to make, and they have to do something before buyers start falling off. The counter offer should come in a couple of days.

This is what I did to get those short sale deals closed quickly. It's really not a big deal, if you know what you're doing.

Lastly, I hope you are talking to the loss mitigation department and now customer service.

Try this method and see if this doesn't make life easier.

Kevin////I never complained about short sales...Just created a post about the lack of regualtion, the difficulty created by the lack of standards...But.....If you were closing that many short sales then you would be in the top ten percent of Realtors doing short sales...To leave at the top of your profession to go do loans is such a noble choice, leaving untold millions on the table for the rest of the Hard working Realtors to finish up for you in your absence.

For many that do know what they are doing, it is not going that easy. And, if I closed 30-40 short sales in six months I would know the difference..Is is closer to 30 or 40???? To those who are closing that many that would mean working 60 to 80 files...

Forgive me for wondering why someone that successful in this field would leave ...30- 40in 6 months would be 60 to 80 in a year...thats a minimum of 250k to 500k... OMG ..I will just go get my lic and start originating FHA loans...

Yea, ya see? This is the reason they say real estate agents are stupid. (And I'm not calling you stupid Mike) You're too easily distracted by what appears to be the big picture, but in reality isn't at all.

First of all, I think you might have grossly over estimated the income from doing short sales in the market that I worked in. (Geographical markets determine how much your commission is, but I thought all realtors knew this)

Next, I don't remember the exact number off the top of my head because that was several years ago, but also because I was closing short sales, Reo dispositions, regular sales as well as investing in bank owned properties myself. So, excuse me if I don't seem to remember every single deal I do, as I suspect you do.

But, my mistake, maybe you need to close more deals to understand what I mean.

Lastly, you said it yourself...250K to 500K a year, which isn't bad. But, let me put it this way, I don't sell real estate anymore and I didn't take a pay cut, I work from home, I work less hours and I take more vacations!

Hmmm, I dunno, do the math. Maybe you should get your lic and start originating FHA loans.

Naaaw... you just keep doin what you're doin.

Have a nice day Mike.

No Doubt, no Doubt at all that I will keep on what I am doing...ANd it is not short sales of houses

JUN

2008

Kevin,

Not sure what ax it is that you have to grind but I will say what most of us are probable thinking and what Mike sort of said... I don't believe you!

There are so many things you say that are just not true...

It is EASIER to do short sales if there are multi liens??? Are you CRAZY??? I will take just a first mortgage ANY day... Anyone who does short sales knows the less you have to deal with the better and having a first and second is WAY more difficult...
Commission varies by geographic area... maybe with regular sellers but banks for the most part will pay what they pay and not by area... even if that were true it would be less due to higher sales price and the income would still work out.
You were doing REO, short sales and regular sales... that would put you at 60-80 for short sales, lets say another 10-20 REO and another 10-20 regular sales... you should have had both sides of the 60-80 short sales... we are looking at 80-120 sides in a year...

All that business and you thought it would be better to change careers and start something new... and now you are doing more in the given banking market... I don't believe you...

As you can see I am not very PC but I do call BS when I see it...

Uhhhhhhhhhh....Yeahhhh..what he said

JUN

2008

I am half in and half out... I started working short sales as a service to my client (barrows) but more and more I am feeling like I am working for the lender who wants to set all the rules of how and when I get paid. I have lost a few deals because of "slow" loss mitigation ""team members". Truth is the system is broken... sellers can't sell lenders are to slow on approval for buyers to want to wait and buy holding back properties from foreclosure by offer short sale options we only prolong the market recovery .

But back to the beginning... I started this to be of service to my clients and help the avoid a foreclosure hit on the record

I agree - By submitting to this environment of a perceive value in short sales we as Realtors are only feeding the pigeons. Just Say No !!

Bonner

Eric....I think we all got started in this to do good things..the issue is can we actually accomplish good things at a pace that produces income for our efforts. If so, continue, and if not, then stop

Secondly, I say again fro those who don't have an hour to read thru all the posts, lack of standards at the MLS level is hurting us all, and allowing many Realtors to do bait and switch tactics on listing homes that cannot be sold at the list price.

I have had some fun with these listings, and demanded to purchase the homes for the list price...This practice is undermining the "regular " homes on the market playing by all the rules...Therefore increasing thier days on market and further reducing thier market vlaue as a direct result

Bonner...If you say so...But feeding the pigeons is a good way to pass the time, short sales over all are a waste of time!!!

OK...its been a record setting post...this is the #200 comment, and if I had returned replys on every five it would have been mich more

I'm 201. I totally agree with you Mike & mentioned the blog subject today in an office meeting about all the time wasted, etc. that maybe we should just forget totally about the short sale market. Well I was made to feel like a leper. I'm sick & tired of being sick & tired on this stuff. We can't help everybody in the world, we are 'real estate enablers' so to speak. Just last week I wrote an offer on another house where the agent or bank doesn't know what they are doing. At least in a foreclosure I won't & don't have to put up with this!

This was a great and timely post! I don't think NAR has any business deciding how homeowners solve their financial crisis. Short Sales can actually help sellers recover financially and credit-wise at a faster rate than a foreclosure on their report. It's a pain, but it's about the client and not our bottom line.

If you don't want to take what the bank is willing to offer, then don't. Sell something else. I think the solution is in agents choosing to do these sales or not, negotiating their own compensation . If you know the bank is going to screw you, have the buyers sign a buyer broker agreement and let them come up with the rest of your fee or have the guts to tell the bank pay or no deal. The buyers are getting a great discount on the property and will be saving money looking at the big picture.

The banks are coming around and if enough buyers request money back to pay their agents fees, based on buyer broker agreements, they will eventually pay what we ask for.

That's my attempt at a solution...

JUN

2008

Sandra, thanks for commenting...there is no easy way to fix this, I wrote this post just to bring awareness..I believe I have done this, with over 3500 views and over 200 comments... Take care

JUN

2008

Hi Mike,

Yes, you have brought much needed awareness to this issue. Thank you. Perhaps, if you started a new post asking for SOLUTIONS ONLY (short & concise commentary only please) we could get a concensus of the possible actions NAR should be directing their efforts towards: Broker & Agent Education, Enforcement of Article 11 of our Standards of Practice, Spokesperson to the Banks for response times, etc. As our regulatory agency, they should be spearheading this issue on our behalf. As a note: By enforcing Article 11, we will instill confidence in buyer's agents to put contracts on short sale properties because they will be assured to some extent, that the agent is qualified. In the meantime, all other agents would be required to get certification. Through regulation and education we can continue to provide professional representation to distressed sellers while enlarging the agent base for future 'specialists' in this area.

Maybe, we could also send the final concensus to NAR as a petition calling for action from agents across the nation.

I believe this issue has long-reaching consequences; particularly, from the 'commission first' perception of our industry that many of the comments appears to contibute to.

Jane..very well said..it would be nice to get something done

JUN

2008

Mike- While short sales are difficult, only a handful of Realtors have a stanglehold on the Foreclosed (REO) market in our area, so if you want a piece of this miserable market you have to decide if you want to play in the game before it goes to foreclosure which leaves some of us with the option of working with a bank (which I absolutely agree - gives us zero respect) or sit on the sidelines til the market gets better. Tough choice when there are bills to pay.

John...I would rather work at Mc DOnalds for 3 months than go thru the grief, and nearly 80% guarentee that it will not close///on the Upside, at McDonalds, we get free fries, and 200 bucks a week

JUN

2008

Well, looks like this turkey is done... I will have a smart person do the math on this post, but it appears on the surface that its about 85% in agreement

OCT

2008

UPdate....there will be many short sales getting approval soon...look for non short sale values to drop like a rock for the next year intil all these are sorted out

NOV

2008

Short sale listings is no different than any other listings. It is our fiduciary responsibility to help the sellers move the property. What I don't like are those who claims to be the short sale specialists and most of them are not even licensed realtors. They claim to not charge the sellers a fee however, the fees do come out of the bank's pocket which in turn is charged to the sellers o 1099C or adds to their deficiency note or unsecured personal note. Do your job as a Realtor and help those who are in financial trouble.

NOV

2008

Hey Zhen

It is not our fudiciary responcibilty to do anything but support our family. When you have spent as long as I have helping those in financial trouble all the while wondering when these things will actually pay my bills..

I think you are short sighted, and obviously have not had dozens of files on your desk that will not sell. At the end of the week, when the gas tank needs to be filled again, and the cupboards are getting bare, and your spouse is asking when do we do something that pays our bills........Oh yeah... Maybe I should keep on doing this crap and lose my house too....

I take it you are all heart and have a job that pays your bills...I owe my family a living and thats it...working for free has its limits and I am done

I know that short sales are a pain - but I have been successful at negotiated and closing short sale properties. YES - it is easier to bring a buyer in after the foreclosure to purchase the home. But for the short sales that do get accepted many times the home is in much better condition because the sellers actually tried to do the right thing.

But Mike - if you are a real estate agent YOUR fudiciary responsibility is with your buyer or seller NOT your own pocket. I guess maybe you missed that day in real estate school? If you can not handle short sales ... then don't take the listing and don't show the homes. There is no law that says you need to show short sale listings.

I have not had every single short sale accepted - but I have been more successful at getting them closed then not. NAR does not need to ban short sales ... they need to ban agents that have no clue what they are doing.

Donna

First.did you even read the post

I walked away from over 70 short sales and listings when I wrote this post...I will never be the one doing short sale listings and working with buyers on shorts either. Wasting time is a conflict with my fudiciary responcibilities and my relationships with my buyers.

With the amount of available inventory that can be bid on and purchased now, why would I get my buyers involved with sales that may or may not happen. I know who my clients are, and I am very aware of what fudiciary means as well.

Your anger towards me is misplaced..You don't know me or what I do for a living. I am the single agent for a few clients who buy distressed properties. As a single agent, I am very aware of the fudiciary concept.

As for my own pocket, when I worked endless hours for months on end to not have banks accepting offers on all the listings that I had, and was constantly on the phone, meetings, and frustration from dealing with litterally dozens of sellers that were living on the edge of losing their homes, I had to walk away. I handed all my listings over to my broker and went on to establish my sanity again. I had cash deals on the table and could not get the deals done.

I made a concious decision to work with the cash investors and we bought deals that we ready and able to close now. Since then I have moved into a great position with an investor/development firm where we actually buy what is actually for sale. Its a great life and I will never go back to that frustration. If thats where you find you happiness, then good for you.

As for what is good for my own pocket....missing that day in school...Are YOU SERIOUS ??? I am feeling very satisfied with my abilty to make a living and pay my bills...I am still in the business, and very extremely busy with cash investors. Had I stayed on with all the crap that was not moving, I would be forced to do what over a million Realtors had to do...quit and go get a job...

PS.......look at when this was written......this was already history when it was written

Mike-
My anger was more directed at the fiduciary comment you made - I guess I am sensitive to that because we have a lot of agents in our area that take short sales and stroke along the seller and buyer. I get very frustrated with this.

I will be the first to say "to hell with the banks" because they are not easy to deal with - and yes - on one occasion I have told the sellers to just let the bank foreclosure and wait until cash for keys is offered.

Short sales are a pain. The banks should be more cooperative - yet they seem to have their head up their rears in many cases, but I do not think a ban of short sales is the answer. Getting the banks with the program is a better solution.

I stand by my comments...I know litterally dozens of good Realtors who are selling cars, running resturants, doing all kinds of things because they stayed on a path that put thier own family in jepardy.. Short sales should pay a flat fee up front and a commission at the end if it closes before foreclosure...

Funny thing..banks insist that REOs be closed within weeks after contract...so these are the same institutions that cant make a decision on short sales, but can close NOW on REOs....If we, the Realtors quit doing the job for the banks on doing the unpaid marketing, overhead, and daily expenses we all face, then maybe another way to handle these situations would come to the top. But since the Realtors are scrambling to do all of the above for free, then the banks will certainly NEVER change how they do this business..

Remember, REOs have to be sold for cash, and closed immediately...think about it

SEP

2009

Hello Everyone,

Has anyone taken a short sale course? Are brokers out there knowledgeable when it comes to short sales. The problem are not short sales. The problem are with agents that have no clue of what they are doing. A short sale is a totally different type of transaction.

Many agents out there are not competent/educated to handle a short sale. I know many, not if more then 90 percent of agents out there that do not know what the mortgage forgiveness act is or form 982 is. If you don't know what these two simple things are then you are not competent to do a short sale. In fact as an agent it is part of your fiduciary duty that you know this. I honestly see many agents out there that do not know the process and wing it. Then they B**** and complain and point the finger at the bank. Just like anything guys you need to be competent just as you were to treat this as a traditional transaction. Remember when you first decided to become a Realtor. It was overwhelming and there was a process for a traditional transaction. Heck, it is a learning curve when you delt with your first REO. Now REO is here to stay. Ladies and Gentleman! Short sales will be here for awhile too!

Reasons why short sales do not close!

Agents

Do not know what the proper documents you need to complete a short sale package
Are not educated with the short sale process to set real expectations
Do not follow the MLS board guidelines or do not know what the rules are
Do not update and disclose to all parties the status and be honest about it
Set expectations to the buyer that the chance of this going through is very low because if the listing agent doesn't know the process the whole deal can fall apart

You guys want to fix the problem? Start educating yourself and get involved to get our economy back on its feet. We all sold many homes when the market was good. Make the best of it when it is bad!

What we feed our mind today is how we will improve our finances tomorrow. I am also an agent and understand everyones frustartion. I truly do believe that we all can make a difference.

Stop reading and go make some money!

Leave a response…

Name:

Email:
(optional)

Comment:

What does the graphic say?

Mike Norvell Sr / Norvell Consulting Group

Leesburg, FL

More about me…

Morris Williams Realty

Address: 34025 Lee Ave, Leesburg, Fl, 34788

Office Phone: (352) 408-7111

Cell Phone: (352) 408-7111

Email Me

A collection of thoughts and ramblings from one who is known for thinking a little and rambling a lot. Please enjoy the posts and add your thoughts. Together we can make a difference in our chosen field of Real Estate! Get great free widgets at Widgetbox! Get great free widgets at Widgetbox!

Links

Archives

Find FL real estate agents and Leesburg real estate on ActiveRain.

Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.