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Is the "Mega-Listings" REO Agent on the Verge of Extinction?

Tyranosaur by Sophie In cities where foreclosures are on the increase you'll find agents clamoring to become an REO listing agent.

They envision the possibilities: Offers galore and multiple pendings.

However, how does one break into the business?

The reality is this: There are very few agents handling the vast majority of bank owned listings.

And their responsibility is not completely rosy.

Among the issues these agents face are these:

They may be required to pay for power, water, plus light maintenance and fix-up.

They will need to do a great deal of due diligence to price, submit, re-price, counter, etc.

Keeping all the properties processed quickly is a must... slip up and you lose your listings.

Say hello to long hours and mounds of paperwork.

Other agents may complain about you and call you a monopolist.

I realize many agents may see the above list and say, "I'll gladly accept that challenge. Sign me up."

Around the country, especially in the high-foreclosure cities, there's a rumor mill. The rumor is this:

"Pre-approved short sales are on the way."

Currently agents will short sale a home if the owner owes more than the home is worth and is unable to keep up with the payments. Market forces dictate this. If the house meets the criteria, the agent and seller fill out the required paperwork, list the property and forward offers to the lender. The lender, if motivated, will send someone to do some due diligence. This third party will let the bank know their opinion about the home's value.

This process is cumbersome.

The longer the bank waits, the more likely the buyer will lose interest or the home could lose value.

In short- the short sale system is broken.

Banks are searching for a better way.

In my opinion (and I'm not alone) it would be better for the bank to decide a price. Then the listing can be treated much like a bank owned property. The buyer will have a better chance of purchasing the home if there are more clear indications from the selling party.

If, or when, banks decide to move to pre-approved short sales, the market should be one step closer to equilibrium. Home values will be easier to predict and fewer homes will go to foreclosure.

It's baffling to me why the banks haven't already gone ahead with this plan.

Who wins?

The buyer. They'll be able to feel more comfortable about their offer in terms of timing and price.
The home seller. Fewer will go to foreclosure- thus shaving considerable time off their credit restoration.
The short sale listing agent. They'll be able to provide more firm/less nebulous advice.
The bank. They should be able to cut the depth and length of their loss due to foreclosure.

Who loses?

The mega-lister. They'll have fewer listings.
The middle man who negotiates loan mods, investment cash deals and data exchange packages.

What's your opinion?

Are we inching toward pre-approved short sales?

Are you for or against it?

I have nothing against the mega-lister... as long as they are able to shoulder the load in a professional manner.

However, I feel we'd all be better off if the short sales process were fine-tuned.

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Chuck Willman is an Arizona based real estate agent specializing in bargain properties. www.AZvest.com.

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Photo Credit: Tyranosaur by Sophie

Posted by Chuck Willman, Arizona Realtor® 480.292.0600 on 02/10/2009 01:49 PM

Comments (66)

Pre-Approved Short Sales in the ActiveRain Channel

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Originally posted at: Arizona Real Estate Specialists: Is the "Mega-Listings" REO Agent on the Verge of Extinction?

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66 Comments on Is the "Mega-Listings" REO Agent on the Verge of Extinction?

FEB

Chuck - I'm all for a streamlined short-sale process with a pre-approved price established to expedite the sale. I'm tired of the REO agents that are too busy to return phone calls and record pending sales that waste my time... I'd be happy to see them go the way fo the dinosaurs.

Hi Chuck - I've seen a few short sale listings recently, with "pre-approved price" on the MLS detail sheet. The proof will be when the market stats start showing more short sales actually closing. It's a great idea which hopefully will continue to gain ground.

As a lender on a couple of short sale deals...I have found that they aren't the easiest to deal with. The banks are very non-responsive to changes that need to be made as they relate to underwriting conditions, etc.

However, they banks don't care about the price of the sale, they care about the bottom line and what they feel it would take to get rid of the property. Banks aren't truly a vested entity in the property. They aren't really motivated sellers. If they were, then perhaps they would take your suggestion and agree on a price.

I have always believed that transparency makes life and transactions easier to work through.

Chuck, I prefer to work with the buyer on short sales - I'm not crazy about the liability....;-) When the MLS says "preapproved by CW or Fannie," that is supposed to mean "for real."

I don't want any part of short sales...mainly because it is such a negative situation.

I'll never begrudge someone a fat portfolio of listings...but it steams me to no end when they can't manage them or the listing itself. Some of the REO agents have a fantastic system set up & are able to manage an incredible number of properties. Some, however, can't stay on top of 3 or 4.

I'll believe the pre-approved short sale when I see it. Right now, I don't believe it will happen anytime soon. Hope I'm wrong though!

FEB

Chuck - Pre-approved price is a problem when the price is wrong in 30 days. That's how fast some markets are dropping. Pre-approved seller, that I'll take.

Right on the money. The ultimate oxymoron is a real estate "short" sale. It is anything but short. I just went through a 4 month process with Countrywide, I was on the Buying side. My buyer was ectremely patient but ultimately lost interest. So no one wins

Hi Chuck--

Pre-approved short sale would be so great! This endless waiting game is frustrating! Hope they see your post and make some changes!

Something has to be done! We are drowing in inventory of over priced houses. We need to get to the bottom, eliminate the overpriced dreamers, get bank cooperation for short sales and get the real estate industry back. Even if it means suffering through short sales until the banks get real.

I believe I understood the bankers speaking today on Capital Hill to say that they want to hold on to assets 'until they reach the price they are worth.' The banks used to write off loan losses at the end of the quarter or year. Don't know why they can't now. I do my best NOT to show short sales. What is the point? An exercise in futility.

Sarah Rummage in Nashville

Hi Chuck,

Your post resonated with me. I'm a San Diego Realtor deaing with well-qualified buyers who put good offers down the "black hole" of a mega listing agent's beauracracy. I'd love to have a bank pre-approved price and something of a streamlined process so that your buyers know if they've got it or if it's time to walk.

Mary Lawler

I work in REO but I'm certainly NOT a mega lister. I have a few banks and some Freddie and a couple of good asset managers. That's enough to keep me busy and you hit it on the head about the paper work. If you do it right there is a mountain.

As one who is frequently on the other side of these guys in a transaction I do have a few pet peeves. Why in the name of all that is sacred would a bank or lender that truly wants to sell a home sign up one agent for a whole state?? I mean who are they kidding. I am really po'd by digging out a listing that says 3/2 and going to show it and find out it's 2/1. These guys don't even visit most properties and I love when the listing says photo not available. Why not? Because if they stick a sign in the yard and the price goes low enough they will sell it anyway or rather the property sells itself. This is hurting the housing market by driving these prices down even further. Something needs to be done but I'm not fool enough to think Washington's going to do it. This is way too far down the food chain for them.

Thanks for the post ... I needed to vent.

Happy Closings ;)

Chuck....its good to see a more realistic side of reo's and their management. Many agents have no idea of how complicated it can be. Thanks for your thoughtful article! Anna Banana

I don't like short sales. Our system is so backwards w/ Banks Do you really think they would go for it? I am an REO listing agent and let me tell you I would rather do that then do short sale.

But if you really want to know what I think.... Banks should not be in Real Estate Business... and it sounds like that's what you want them to do.

When dealing with a short sale, I want to get a good feeling from the listing agent that they really do have something going on with the bank. If the agent is evasive, non-responsive, property is difficult to show, I just move on. Working a short sale with a great agent really helps smooth out the enevitable bumps.

As for REO agents, many will disappear just like the agents who entered the business when the "free-money" loans were all the rage. These agents had no established clientele when they started and will have none when the REOs dry up. I would strongly doubt that these agents could name one client they served last year.

We have the #1 agent in the area and he had over 600 listing side transaction last year all REO listings does anyone see something wrong with that? I couldnt imagine. I handle a couple and feel overwhelmed and we have the Fannie Mae approved short sales here. Except not sure who prices them they are way high

Let me guess ... you couldn't get into the REO game could you?

Your plan is never going to work because of what you mentioned. THE REO LISTING AGENT HAS TO "PAY FOR POER, WATER, PLUS LIGHT MAINTAINANCE AND FIX-UP."

In your example, what is to stop the seller from making it near impossible to show the property or do any of the things that help sell it like keeping it clean, leaving during the showing, etc ...

Without a real desire to sell, the bank will be forced to do a foreclosure anyway and they will lose more money because they "hoped" that your plan would work.

I would suggest the next time you have one of your great ideas; you talk to some of your peers before you decide that "it's the best idea since sliced bread!"

REO business is going to be around for awhile, and so are short sales. If you want to do REOs, expect to have a $25,000 expense account to float those up-front costs Chuck references. And expect to increase your staff - one of my clients did over 350 foreclosures in 2008, and he has two full-time transaction coordinators as well as a full-time bookkeeper to stay up with the accounts payable and receivable on all those properties.

Whether you like doing short sales or not, they are reality and they'll be growing as Obama seeks to halt foreclosures. Either get educated on how to handle them or find someone you can refer them to, so you don't have to turn away past clients and other people in your sphere who have no other option and are turning to you for your help.

Lot's of good comments here. I've done some REO listings. I've had some REO buyers. I've had some short sale buyers, also. Just part of the business. Short sales are ever so slowly evolving into a viable option for patient buyers (and agents).

I agree that there are too many listings of REO properties that are not getting serviced well. It's too bad that many asset managers are so overwhelmed and prefer to work with only a few select agents, rather than spread the work around. They don't have time to train others.

Changes are ahead of us, most of them will be good.

Chuck: timely blog.

Top of the board on the Optimist group.

I'll come back to add my comments.

Hi Chuck,

This is a super blog and I couldn't agree more. foreclosures, and sometimes foreclosure agents, are ruining our industry. The short sale idea really is a win-win for eveyone involved. I wish the Obama administration would consult agents in the field because it seems like most of us are on the same page. Well written Chuck!

spread the wealth.

short sale delays.... delay commnunities economies abilties to recover quickly

Chuck - Interesting post. While I don't have too much of an opinion on REO agents, I totally agree with improving the process. To wit:

1. Banks are making a great case for why they should not be in real estate.

2. Anything that can be done to make the process more efficient would be welcome. REO mega agents will eventually dwindle down just like regular agents have in this market correction. It isn't an easy job, I don't envy them.

3. I read recently that for every house that forecloses, banks have to have 6 to 7 times the price of the house held in reserve - that would be $1.2-$1.4 million for a $200,000 house. If that is true, then we know one reason why they're holding so tightly to their bail out money and secondly, back to #1 if they are letting this happen to themselves, then they doubly don't belong in real estate!

Chuck- I am in the process of multiple short sales, and they are a pain. Disheartening for all involved. After a while I feel bad for the buyer, the seller, ME! I would love, love, love to see a streamlined process! Sign me up. Short sales make sense. All this REO business is perplexing to me, WHY would a bank want to go through all that when they could just sell it long before the REO process? Right now I wish I had caller ID that says "Short Sale Seller" so I could just pass the call along....but if it were streamlined, honest, and real? SIGN ME UP!

The moment you get your REO listing, have a fellow agent or one of your trusted clients put in a really low ball offer. Purpose: to force the lender to respond and get the ball rolling. If they accept the low ball offer, you or your client just got a house for literally pennies on the dollar. Something tells me they won't accept it, but they will pay attention to you now. You cannot expect the lenders who are inundated with REO problems with more on the way and no clear end in sight to drop everything and figure out a better way to conduct business. Maybe in 2012, when they get a breather will they reconsider their options.

Hi Chuck...

We've had the opportunity to test drive the mega market. We didn't like it because we're expected to do as we're told. The problem with that, for us, was what we were being told to do wasn't ethical. So, we decided to pass. I don't mind the short sales. It's much better than being bossed around and treated as if we're totally stupid. Maybe someone around here will put together a course to teach the banks the in and outs of REO's :)

TLW...ROAR!

A lot of agents here are using Carl's suggestion for short sales too.

Wow great post... I think somehing needs to be done.. We will have a lot more SS and REO.

Even once the bank owns it , it sitll sometimes take forever

Hi CHuck; I am totally in favor of pre-approved short sales! That would be awesome. And hate the REO mega broker stuff - unless of course I suddenly become one my self. :)

You have all hit the nail in the head.....we have a case of Bankers practicing real estate without a license.....as far as I'm concerned, this is illegal....surprisingly is not the only thing that they are doing illegally.

They tell realtors what to do even when it is illegal or unethical, and realtors' association across the country have not been able to respond fast enough to clip these bankers' wings back....so it's up to each of us to stand up to them.

The bankers have shown us that they were not able to handle their own banking industry, and now, they have the gall to try to run ours.

Bankers should stick to banking and realtors should stick to real estate.

A property will simply sell for what the market dictates ... we should just list the properties, get the appraisal done, and close the deal, period. Let the bank work-out and write off the deficiencies after the fact....no matter how many weeks they spend doing their papaer work, they will not get a dime over what the market is.

Thanks Carl!

This is tough for every body. The lenders don't want to loose any more on a transaction than they have too. I suppose in many situations they want as few contact points as possible because it's efficient (in theory) to have to work through a small number of realtors.

There will probably always be mega agents, and you hit the nail on the head, the short sale process is way out of whack.

As a lister of REO properties (that makes me one of those dreaded REO agents), I have to say that i agree with many of the comments that have been made on this blog- Banks are out of control with Short sales, Agents are out of control with their REO, Buyers and Investors have a "Give it to me for 50 cents on the dollar" mentatlity, and the current housing situation seems to have no end in sight.

i can offer some insight, however, to those of you who do not list REO properties, but wish you would. There are three types of REO agents out there right now: (1) Those with a few properties who are new and are trying to impress their client (which is NOT a bank, by the way, but an Asset Management Company!), (2) Those with a ton of listings who are overwhelmed and don't really care about anything but closings, and (3) Those with a lot of listings who have a good system in place and run their listings like a business. REO is very hard work. you are constantly running around solving problems, fixing things, spending money, trying to get reimbursed after 90 days, working with pathetic title companies, spending 5 hours a day on reports, trying to answer every phone call.

Yes, it is difficult to let EVERY realtor know who called on a property that it is back on the market. Yes, it is difficult to answer every email and phone call in 10 minutess. Yes, it is difficult working with ridiculous offers and submitting tons of paperwork.

But here are a few insights that i would like to share for those of you who are not REO agents, but are bringing a buyer to one of my properties:

(1) Read the MLS printout COMPLETELY- everything you need to know is there. Don't call me and ask, "It says Bank Foreclosure, so does that mean the BANK owns it?" (2) Please be respectful of my time and systems. When I ask for a contract packet to be submitted a certain way, don't do it differently- my client wants it a certain way, and I have TONS of paperwork. (3) Please EDUCATE your buyer and yourself on the process. All you have to do is ASK before you tell your buyers! (4) Send your offers in, and then wait- if you don't hear back in a day or two, it's because I haven't either. REMEMBER, I don't get paid until it closes either- so trust me, you WILL KNOW when your offer is accepted. (5) And speaking of offers, if I say "48 hours to get me addendums and EMD"- that means 48 hours. Don't make me chase you. My time is much too valuable, as is yours. (6) Don't call me and ask "So, what do you think the bank will take?" If the bank lists it at $120,000. Then they will take $120,000! If you want to send in an offer for $100,000, that's great- just do it, but don't ask such a stupid question! (7) Be respectful of us as realtors and our properties- we take great care in cleaning them up, making them look nice, and making sure locks, signs, lock boxes, flyers etc are taken care of, so when YOU show YOUR buyer our home, YOU look like you are professional as well! ?Lock the doors, turn off the lights, and leave it just like you found it- REMEMBER- I AM PAYING THAT LIGHT BILL!

I agree that there are many bad agents in REO- but they aren't all just in REO- there are many bad agents out there period. I LOVE REO. I love working with the banks. I love cleaning the houses. I love dealing with the buyers. I HATE dealing with the other REAL ESTATE AGENTS who don't have a clue. This is a business. Act like the professional your license says you are. Say "Please", "Thank You", and ASK FOR HELP!!!!

I hope this sheds a little light- if all REO AGENTS and REGULAR AGENTS would just be professionals, we really wouldn't be in as bad of a mess as we are!

Chuck- Being one of those Mega listers of the REO properties, I agree the pre-approved short sale would be a major improvement over todays system.

Our current situation is a major lack of awareness in the market first of all that a short sale is possible. Most owners feel helpless in their situation, and never attempt to sell their home. I do my best to reach them, however the process can be daunting at best with many of the lenders. Many banks are horribly understaffed and unprepared for what they are facing.

To use a surfing analogy(although I'm no surfer), the market is currently like a wave, and most banks are behind it. Until the bank staff up, create systems to pre-approve the values for short sales, we will continue to fall behind the crest. A preapproval, while possibly outdated by the time a contract is received, does establish a starting point, has the bank prepared to respond in a timely manner with reasonable knowledge of market values and conditions, should substantially reduce the time to close after a contract is received. And that is the critical timeline in the process. Buyers do grow impatient once they have a contract on a home. And the preapproval would expedite the process and give all parties piece of mind.

Me give up the MEGA lister title, IMMEDIATELY!

I don't know if preset pricing is the answer, as the market is dropping so rapidly that slow moving banks would never catch up with the prices...but I do know that there is a real ethics problem with awarding so many listing to a company that they do not have time to take pictures, call back with lock box combinations, update listings and are caught all over the world when forced to return calls or their office reveals that they are out of the country for another week.

I blame the banks who are reveling in their bailout money and have no responsibility to any one except those handing out bonuses on long outdated performance. There is no accountability in any of this...I have started calling the HR, Customer Relations Departments and any live person I can find with sad stories of my buyers plight while trying to purchase a home that has declined in value 30% while waiting for the bank to decide the fate of the seller and the agent just crying lack of time and communication with the bank. I do get things done, but I am ashamed to have to go to such extreme in an industry that is known for its code of ethics. If you have over 30 listings and there are no pictures and no details in the remarks except short pay bring offers, You are in violation of professionalism at the least and ethics for sure. Wow, I guess this is an issure with me.

It's great to hear from all ends of the business. We sometimes forget that there are two sides to each story. We received a yes answer today from a short sale bank and we closed others ss deals just this year I would like to say that the banks are getting better at it. Two years ago we did wait 4 months only to hear "no." REO agents are also get the rap for selling the property before it hits the market and I hate to say that I see this too often myself.

Here's the reality: THERE'S NO SUCH THING AS A "PRE-APPROVED SHORT SALE." There's just not. No way, no how. Then what do agents mean when they say that? What they really mean (maybe) is, "on a unspecified date in the past, the bank's negotiator expressed an initial sense of optimism regarding an offer at a certain price (probably without getting a clear net sheet breakdown or consulting with the 2nd)." What does that mean today? Nothing. It's like a property that was in contract previously on a regular sale. Just because a seller was open to a particular price on a particular day in the past under certain terms, market conditions, market forecasts, and nuances within the offer, the buyer, and the buyer's agent DOESN'T MEAN that they would take the sale top-line offer price forevermore in the future.

A "Pre-Approved Short Sale" is just another gimmick designed to attract buyers/offerors for a property. A bank will only approve an already-existing contract between a buyer and seller. They don't just throw out numbers that are "pre-approved." Therefore, by definition, any listing agent that proclaims this to be the case cannot be trusted.

Aaron Lewis
The Lewis Team
Prudential California Realty
www.weworkharder.com

Interesting post Chuck thanks. Listing short sales and bank owned properties can lead to Realtor burn out as the listings pile up, the banks are overwhelmed and the market changing so rapidly. I know the drill pretty well and don't mind taking on a few a year but I decided a long time ago not to make it my specialty.

Working with Buyers though is just good business for me. I recommend being well informed - take all the current Continuing Education on foreclosures and short sales you can stand, know your market and serve your Buyers willing to take on a distress sale to make them some real equity!

Kent Davis

I must have run into a pre-approved short sale. 6 days on market and already in Deal Pending status. My buyer, who wanted to view it tomorrow, couldn't believe it! Hope it lights a fire under her.

If they want to sell these properties the need to do something. The market will stabilaze as soon as the banks act like the want to sell the property.

It would definately be a win-win deal.

Chuck,

I am doing a few short sales. major headache... especially with 2 lenders involved. I would like to see those departments better staffed and ready to handle this. Don't know why when you call them they make you fell like you're the enemy, no matter how nice you are they are always in a bad mood.

Then the mega listing brokers. Yes there are some parts of town they messed up the market even worse. I do lots of BPO's as well and notice say in the same neighborhood 5 active foreclosures and short sale that are almost the same. The mega-broker's listing is most of the time 10 to 20% less than everyone else's ... or the least expensive one. and there goes the market. for no aparent resone, and I can find some that are sold recenly ( in the last month) for a lot higher. now everyone has to fallow the trend and reduce the prices down even more. all for one listing that might have not even had a pic listed. I like to see listings with several pictures so I know if the house is in good condition, has cabinets appliances etc.... some agents will not put any of the info in the remarks.

I woull like to list REO's but would not take more than a dozen at the time so I can properly service them/

I ran into a good friend who is a mega-REO agent. She commented to me that her business is slowing down. Not as many assignments from her asset manager company clients. She is looking for additional business.

Sign of the times.

FEB

Pre-approved short sale would be great, but how are they going to deal with the changing price if the house doesn't sell quickly enough?

There is a basic problem with the so called "pre-approved" short sale. They have "pre-approved" a price.

I've made offers on "pre-approved" short sales and unless the offer comes in at the "pre-approved" price, they don't entertain it.

BANKS DO NOT KNOW HOW TO SELL REAL ESTATE.

They believe that by "pre-approving" a price, that there will be no negotiation.

HA! Tell that to home buyers who listen to the news.

Great suggestions, Chuck! Your ideas make a ton of sense. I wonder though if the banks will catch on!

I think you touched a collective real estate raw nerve that we are all feeling right now. I have always felt that this process is a__ backwards. Banks need to tell us what they will accept and not waste our time by letting us guess what that number is. They should also pre-approve sellers - don't make everyone - sellers, agents, buyers, etc. wait to see if they qualify. As an agent, I feel that there has to be a better way. Write your congressman!

Chuck, this is a brilliant insight. It's too bad that the banks don't have the brilliance to figure out the same thing...

The pre-approvals that were previously discussed in the industry only apply to Fannie backed loans being serviced by Countrywide.

www.INeedShortSaleHelp.com

The current system of mega listing agents inthe REO arena is hopelessly outdated and broken. They don't work weekends, they work nine to five, and they don't seem to care that "buyers" are in control of this market now. Until this cozy arrangement by a few well connected REO agents with their equally clueless lender clients is broken up, it will take 5 times as long to clear up the incredible backlog of present as well as future foreclosures. Most of them don't want to "rock the boat" and chance losing their clients' business. I believe that no one agent or team can possibly manage or work effectively more than 25 listings. Share the worlkoad and we can get things moving across the country.

Not all agents are created equal and that is certainly true with REO's and short sales. My experience has been that 20% of these agents do 80% of the business. Some are truly GREAT to deal with and others have no business being in business.

Your post discusses two very different topics. First, listing for REO's is difficult and requires time and a lot of attention to detail. I know this first hand. But, they are usually guaranteed to sell listings as the banks are pretty motivated. Due to the sheer number of foreclosures in my area there seems to be new agents stepping into the REO ring.

The Short Sales system should definitely be revamped and many times it is the banks fault that these sales don't consumate. They drag their feet so long and proceed with the foreclosure eventually selling it for less than they could of otherwise. A typical left hand doesn't know what right hand is doing scenario.

Chuck, this is excellent and I hope it helps a lot of people understand the process isn't a cake walk. From my experience working with my broker who has been doing foreclosures for years you hit the nail on the head about the paperwork and accounts. Shory sales are not going to be any better since even though foreclosures aren't perfect it still is a system, and I don't thing short sales even have that yet, It seems if you hit the right person on the right day it will approve. I have experienced the agents who don't answer or return calls and it is frustrating for everyone.

You have hit the nail on the head. And as we blog Fannie Mae is in the middle of a pilot program for "pre approved short sales" in the Phoenix Az area & in Florida. From my understanding they started the program in December & are running it through mid March. Indications so far are that it is going good, with the houses in the pilot program getting bank approval on offers anywhere from 3 hours to 2 days typically. Is that kool or what. The lender, Country wide in this case is rerquired to get a BPO ahead of time that they use for the list price & if the offer is at, or close to the list it gets an automatic approval. The listings have to say Fannie Mae pre approved short sale in the listing. Oh, & they say one of the requirements is that the lender quit dinking with the commissions too. They say if it goes well they are going to extend the program & expand it to other lenders & maybe Freddie Mac as well. If it all works well, I can't see other investors sitting there & not joining in. Potential flaws yes, but so far it looks way better than what has been comming down the pike. This could get intersting. Time to start thinking about turning off the negative attitudes towards short sales, just around the corner. We can hope.

Craig Chapman

Solutions Real Estate

CraigsHouseDeals@yahoo.com

If it works that would be great. Short Sales aren't realy working right now. I've had an offer on a short for 3 months and don't think it is going anywhere. I'm the buyers agent, so there isn't much I can do, but call the listing agent and bother him every now and then. I think my buyers will walk soon if the bank doesn't do something.

Utah, On short sales, don't feel that you're bothering the listing agent on a short sale. You're serving your buyer as you should trying to help move the sale along. Usually I'll send an email once a week or two and then forward the response to my buyer. This also lets the listing agent know that your buyers are still interested and helps keep your offer in front of them. Then hopefully the listing agent is also contacting the lender frequently as well.

A pre-approved short sale would be great if all lenders had an excellent system in place that streamlined the process and allowed for a 30-day close.

I certainly didn't expect this little post to generate so much response. I appreciate that people from different segments of the market have chimed in. To the mega-listers- I understand your case load. To the loss mitigators- ditto... I don't know how you are able handle the quantity of files that find their way to your desk. To the buyer's agents who submit the offers- I wish you well as you seek answers where there appear to be none. To the short sale listing agents- may you find the ways to ease the process. To those wishing to short sale your home- my sentiments are deepest with you... a successful short sale still means you're losing your home- I hope you land on your feet. To the banks... I see that you're trying to figure out ways to make short sales and REO properties move through the system. Bottom line- this unprecedented mess has us all wondering about the best ways to address and fix the system. I see that there are no shortages of ideas and opinions... hopefully we'll come through this market with better knowledge- so that, should we find ourselves teetering toward the conditions that got us where we are today, we'll be able to avoid the mistakes.

Thank you one and all for your very insightful comments.

Chuck:

As an investor and married to a licensed agent, I get both sides. I think pre-approved shorts would be a step in the right direction, I agree it needs to happen, We are seeing shorts at the sherriff sale auction, highly unusual, but a sign of banks that are FULL of REO's and trying to dump them FAST. Pre-approved shorts will hurt me as a cash buyer, but will help my wife as an agent ,so its a win-win here. Its all about positioning!!

FEB

Wow! This is one of the best discussions I have read in a long time. Lots of good input. I am not a mega agent, I had a few REO listings last year, and learned a lot. I do not know if I would ever want to be a mega agent, I like being able to balance everything and do a great job for my clients. I want to be around after this cycle ends and that means keeping my reputation good with past clients, and with fellow agents.

I have heard more rumblings about short sales becoming easier, but I will believe that when I see it. If there weren't so many properties with 2, 3 or more loans on them, maybe it would be easier, but getting all lenders to agree to the short sale is a major headache.

Great discussion, ideas, etc. But I have to point out that everyone is talking (or writing) like the banks own the foreclosed home or the loan on the short sale. They don't! Banks wrote the loans and sold them to investors - remember. Getting a short sale approved is a difficult and lengthy process because the investors don't want to take it in the shorts. Investors are holding the entire process hostage. I've seen some properties where the investor group paid off the bank loan choosing to try to sell the property themselves. It has now been on the market close to 400 days without a price reduction! When it was first listed, it was $100,000 over priced - now it is closer to $250,000 over priced and still sitting there. Most of these investor groups are peoples retirement funds invested when the market was booming - they took huge risks for huge returns. Now they are hoping they can hold on until the market turns around - they don't understand that until they get out of the way and let the market work it can't turn around!

FEB

Chuck, hallelujah, this is something that makes so much sense, banks/lenders/investors will probably never do it. It doesn't matter to me who owns the loan, if it's the lenders, then they are the one's who need to set a sales price on the short sales. That gives buyers, homeowners, and agents a place to start, and something to go with. Right now the buyers and sellers are so far apart, and negotiations take over 6 months, buyers who were interested are not interested by the time they receive a response. One, because the value of the short sale has probably dropped at least another 10% since the original offer was made, and two, because the buyer probably got tired of waiting for a response and moved on to another property to purchase.

MAR

I am an REO investor. Coming from the other side of the table I see in front of me behaviors, both good and bad, which so many have described. Michael Dumas, Tampa, FL, poster #35, is right on as far as I’m concerned. Now that I am associated with an agent in California who is organized and methodical we have made many offers. The cleanliness of the offer, dotting the I’s and crossing the Ts seems to work. I don’t know if my lowball offers have spurred activity from the lenders yet it looks like that was the case in one scenario.

As Chuck said, “Who loses?-The middle man who negotiates loan mods, investment cash deals and data exchange packages.” This scares me. I depend a lot on my realtor. I’m sure he appreciates my business also. Because banks are acting as realtors this is great cause for concern.

Vivian Hooton, BuyLowREO.com

I apologize for the garbage in the top of the post. I did spell check in Word and had no clue it would carry over. Without a preview option I unfortunately subjected you to all that.

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