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Agents That Are TOO Good For Short Sales

I had an interesting conversation today, with a Buyer's Agent who was submitting an Offer to Purchase on one of my short sale listings.

He doesn't understand why short sale listing agents want to WASTE so much time on these deals and seemed to be very angry that he is having to be hassled with a short sale deal at all. I explained to him that I am thankful for all of the business and that in a market where many agents are struggling, I am actually doing quite well. I agree that negotiating short sale deals with banks can be frustrating at times, but I don't waste time on short sale deals... CLOSE them, earn a commission while helping sellers avoid foreclosure!

He then asked me how long it takes me to close short sale deals and I told him that most close within 60 to 90 days of an offer being presented... but he must be used to closing and getting paid in 30 days. In a perfect world that would be nice, but unfortunately we aren't living in a perfect world!

He also didn't like the fact that the seller and I won't sign the NC Confirmation of Agency Relationship, Appointment, and Compensation form, "guaranteeing" his commission percentage, until the Short Sale Acceptance Letter is received from the seller's lender. He even tried to include this Compensation form as an addendum to the Offer to Purchase and Contract, which is prohibited by NC Real Estate Commission Rules/Regulations. The lender won't tell me how much commission they will allow until an entire short sale package is submitted and reviewed, so I can't guarantee anything at this point and it would just be bad business to do so. I even had to show him our MLS rules on short sale listings, of which he was unaware.

All of my previous short sale deals (when representing buyers and sellers) have been approved for 5% total commission (even when the listing agreement with the seller was for 6% total commission)... which was split 50/50 between the listing and buyer agent at closing.

He argued just about every point of the deal, including the short sale verbiage that I requested to be added into the contract. The seller can't sign a standard Offer to Purchase and Contract without some sort of statement regarding the required approval by their lender, that would just not be wise.

I guess that WORKING HARD for a living is beyond some agent's comprehension.

Sorry, if I got on a rant... what do you think?

Posted by Cheryl Powell - ABR, Broker, Realtor - Remax Signature- Concord NC Real Estate on 03/08/2009 03:43 AM

Comments (63)

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63 Comments on Agents That Are TOO Good For Short Sales

MAR

Short sales are a lot of work. They are a large percentage of our listing here in Orange County, CA, and they help people who need it; so, I am gratefully doing them.

I think that this agent is a diva who was spoiled picking low hanging fruit. Now he has to work a little harder for a living. Too bad.

Hi Christine, I agree with everything that you said! Short sales help homeowners avoid foreclosure and buyers are able to purchase short sale homes at a good value... it's a WIN/WIN.

I like the way you put that J, you have me LOL!

Hey.. If you are only in this for the money, then do do the short sale stuff... But, if you are like the most successful people in this life... all areas of this life, you are helping people, enjoying it, making relationships... and the more people you serve, the money will be there.

One of the nice things about S/S is that the seller's are usually not very picky with what offers they accept. What do they care, their not making a dime. I've found that lately the banks are turning offers over quicker so there's not the 60 - 90 sometimes 120 day wait. Once the bank comes back, with it's counter it's take it or leave it. I liked the quick closing when the banks were not involved, but there are some positives to the buyer negotiating with the bank rather than a greedy or unreasonable seller.

MAR

Cheryl - although short sales are a lot of work, it's a good thing for a lot of homeowners right now that some agents understand that it is worth the hard work. I'm a firm believer in "what goes around, comes around". Your hard work will pay off in the end!

I look at listing short sales as one way to help my seller clients who are in distress. And I also don't shy away from showing property to clients who may really want a property that just happens to be a short sale. My clients' interests are my first priority. They just need to understand what is involved in the process, including how long it can take.

So I think that anyone who shies away from listng/selling short sales must be independently wealthy, or is in it only himself.

Since there are so many short sales now, and more and more people are becoming adept and skilled at selling short sales, hopefully the loss mitigators are finding it easier to process the applications and offers for short sales once they see the files are ready.

Hello Darren, I definitely get job satisfaction from helping people and making lasting relationships with my clients! Thanks for stopping by...

MAR

Hi Jim, It would be nice if the short sale negotiation process with lenders could move along a little quicker. I think I heard something about the Federal Government considering some new regulartions regarding this... but didn't hear if it actually happened.

Hello Lori... Thanks for the positive comments! I definitely think that short sales are worth the hard work. As a listing agent you help a seller avoid foreclosure and as a buyer agent you help them get a GREAT deal... plus you make a living in a tough market!

Hi Pacita: I agree with everything that you said! My client's best interests my number 1 priorty as well, regardless of sales price, short sale or not, foreclosure or not... that is the ONLY way to do business as far as I'm concerned.

MAR

Cheryl - so far, short sales have been no fun for me. So what? I can't complain about working a little harder to get the property that my buyer wants. My contract with my broker doesn't say 'easy money transactions only'. I am glad to be working hard for my clients - some agents don't have any clients to work for.

Hi Cheryl - My guess is that the buyer's agent has lost deals on short sales before. There really has to be a good listing agent to get these closed, and maybe he's not used to working with someone who has your systems and experience.

We should have all had one of these by now. Whats the big deal? We make good money in good markets... so we have to work a little harder now. Short sales are a service- and that Agent should appreciate the fact that you are working way harder and they are gettig a paycheck!-Dinah Lee

I hope the other agent was just "posturing" and wasn't really that dumb!

Keep up your hard work, educating buyer agents is part of the battle. Have you heard of the CDPE class? I just went through it, I have been doing short sales for 2 years and the class offered really great content, checklists and systems. Check it out, or you could do what I do and have a website that goes over all these buyer agent short sale questions, it has eliminated some of the frustrating phone calls. Let me know if you would like to know more on this

I hate to throw a monkey wrench in the works of this little rant, but I too hate working with short sales. I'm sick of getting the run-around from the banks, regardless of which side of the transaction I'm representing. No matter how many times I've needed information for a client, the banks have been non-responsive, or clueless.

Cheryl, that is very informative. I have bees skepticle to get involved in short sales thus far, I guess because of the unknows.

In some markets you DONT have to work short sales. I don't and I wont. I did and its way too much work for way to little money. I'm with Lisa, you can have them all. Personally I refer them out to see if they can keep there home on loan Mods. Better for everyone than the proverbial short-sale.

Cheryl,

Congrats to you ..short sales are work and it is what it is! I'm thankful for the fact we do not have many here but if we did they would need to be done and I'd leave them to an expert like you!

See Lenn Harley's post on commission...shame on the agents who continue to be part of the problem and not the solution....while buyers may sometimes be hard to get for short sales...you are often better off just saying...NEXT....

Cheryl, not a rant ! But reality ! It is what it is. We also have had success with short sales ! They are a bit more work but they are what they are and agents should get used to them. What you asked is pretty basic stuff ... sounds like the other Realtor needs to expand his horizons per se. Also, the big picture is not only is your seller potentially avoiding foreclosure, often times buyers are getting pretty decent deals on these properties so it is worth the wait for them as well !

In my market if you don't work short sales well..........................

You are just not working.

I had a buyer call me to see if one of my listings was available. I said Yes.

He was so mad.

His agent told him it was sold.

Opps caught.

He tried to get out of BA contract and the Broker wouldn't let him.

No Trust after that.

How's that working for ya?

I consider short sales to be a way to help people from going into foreclosure. It is more work, but we can't have it all! It may suit some realtors more than others. I have found that the banks are working harder at making the process more streamline. They have hired more people in the loss mitigation departments and it seems to be paying off. I have a short sale listing and they are offering full commission, plus a $1,000 bonus to the selling agent. So it might become a little easier for the realtors.

Cheryl...

There is an inherent problem with deciding compensation AFTER the offer. It is absolutely unfair to arbitrate commission after the fact ... after the MLS placement and the unilateral offer to compensate.

Fannie Mae agrees, and has instructed lenders negotiating short sales on FMNA loans to NOT adjust the commission unless it is over 6 percent ....

And if it's over 6% why is it in the MLS at a higher split?

We sell short sales. No choice. We're not going to deprive our buyers of opportunities as the percentage of short sales/listings grows. We have no ethical choice but to show and sell them, or at least try.

We do counsel our buyers that the #1 key to getting a good home that is a short sale is patience.

We closed on one 2 months ago that was written in March 2008.

I'm due to close on end of this month that was written Jan. 25. That's not too bad. Great house and well worth the wait.

It is what it is.

In this market you've got to be willing to be flexible.

Cheryl--It sounds like you know how to work a short sale. My only questions to the listing agents are not about the commission but has the short sale been pre negotiated or will we have a longer wait and have you done one before. Agents with short sale experience are not going to work for nothing and understand the process. The only reason I ask these few questions is to make certain there is a good chance the sale will go through is a somewhat timely manner for the sake of my buyer not my pocketbook. We may not always like the short sale process but if we want to properly represent our buyers we will have to work with them.

Work for the client not for the money. Advise the client, counsel the client, protect the client, and assist the client to the best of your ability. Seems simple enough.

If a buyer's agent doesn't think that selling a short sale "fits" their business model, the buyer's agent needs to inform prospects, customers, and potential clients of that fact up front before the offer is ready to be submitted.

I doubt the buyer's agent had the same conversation with the buyer. Seems funny that they want to complain and vent to you about all the things that are "wrong" with short sales instead of explaining their opinion to the buyer. Probably wouldn't have the buyer or the offer if the buyer's agent did that!

Short sale compensation is an ongoing issue here in Metro Atlanta, and we answer questions about it weekly. Unfortunately even with Fannie's new guideline, it's still an issue. If the compensation paid is usually less than the MLS advertised commission, steps need to be taken to more accurately define the compensation. One of our listing services is attempting to address it now.

Education is the key all the way around . . . prospects, buyers, sellers, agents, Realtors, and brokers. We're learning as we go!

The problem is withe the agents listing many of them. They have no approaval and have picked the fake listing price out of thier butts! A total waste of everyones time considering only 1 out of 20 short sales ever go anywhere. I had three friends of mine have their short sales pulled out from underneath them in Atlanta in the past few weeks after they each had worked them more than 6 months a piece. That is not a productive use of an agents time.

I do a lot of short sale listing in my area and they are very time consuming but if you do your job, they'll close. If you're closing 1 out of 20 you should look at what your doing and change.

I go with whatever the market is doing and luckily I get on the "trend" before most agents realize that's where we're headed. Agents who are "too good" for short sales probably won't be in business later this year. The way I see it is agents with that mentality means more work coming my way WOOT!

Hi Cheryl: I think that agent is a nitwit who isn't likely to be in the business by year end. Like you, my short sales are closing in 60 to 90 days. That's life. I'd tell that agent to get over it. When it rains on your parade, you parade in the rain. Short sales aren't going away any time soon. Buyer's agents need to learn how to qualify the possible short sale so they aren't wasting their time. If you pick the right short sales to work, they all close.

I got 2 short sales closings for the month of March and 4 more that have at least one approval working on the second mortgages. . yes they are a lot of work. . but I prefer to sit down in the phone talking to banks than digging ditches to feed my family.

my feeling is that if you don't want to work short sales, that you might want to find a new career. If you have have enough business that you don't have to actively work them good for you.

we have done REO for over 20 years, now we are doing short sales and some loss mitigation ( no money in that but great personal satisfaction that you have helped someone save their home).. i am always taking new courses and going on webinars to get better..most agents in my area just won't do that.. they want to just " jump in" to the short sale and reo market..they are making it very hard on those of us that DO this part of the business all the time... you have to KNOW how and who to talk to at these banks.. I , too, have had agents lie about our listings saying they are under contract just so they don't have to show them. These buyer's agents are always trying to put things in the contract about there commission and also repair request which most of the banks won't consider... it is very frustrating to work with agents that don't know what they are doing.. i wish they would just refer the buyers to us.. i would gladly pay them a referral fee..

Your commission is now protected at 6% on govt loans, right? That's a step in the right direction.

We don't have short sales up here, but reading all the blogs from the States regarding these things, they appear to be a lot of work, and the banks don't seem to want to cooperate.

Cheryl,

I am sorry but I tend to agree with this agent.

I don't mind working hard nor do I mind having to wait for a commission check, I just have not seen much cooperation from banks on these types of sales. And as such, I try to avoid them.

The agent you are talking about must still be stuck in 2006. This day and time ~ hey a deal is a deal ~ and a deal is a pay check, we will take whatever we can get!

Now that I have been through a few of the short sales and one forclosure I know it's easier on everyone if the Realtors can stay calm, patient and laugh at how crazy they can be. If any of the players have a bad attitude, it makes the whole process a misery. I have one that hopefully will close next week.

Hi Cheryl~ If I have a Buyer that wants to see and make a offer on a short sale, I do it. Picking and choosing houses to show and against the buyers wishes just because an agent doesn't want to do the extra work that may come along with it, is just not fair to the buyer. I do whatever it takes for my clients an do it happily! Some are just easier than others, but that is life!

Hi Cheryl,

Getting paid in 60-90 days may not be ideal, but at least you are getting paid. These days we have to do whatever it takes to make a living.

That agent is expecting "easy" money, and isn't going to be in businees very long.

-Lisa

i agree if you wanted to be gauranteed a check every friday you should work at Mc Donalds

We sell short sales -- no choice here in Arizona either-- but they do take a LOT of time. We have spent upwards of 9 months getting them done. Until the market changes most of us will have to work on them.

Patience is key. And letting buyers know this and to expect the unexpected. Buyer Agents need to know they have to do more work as well.

Short sales can be a lot of work, but they can also be vary rewarding. I believe that as Realtors, we are in a position to do all we can to help this economy. The only way we are going to see this market not only stabilize in the short term but the long term as well, is to help eliminate inventory, and ensure future growth. In order to see a sustainable market in the future, we are going to need consumers buying homes. If we simply all decided to stop helping homeowners with short sales, then we would see the number of foreclosures expand exponentially. We would then be left with previous homeowners who will not be in a position to purchase a home for in most cases 5 years. By assisting with short sales, we help the owner in a number of ways, but the most important 2 are; 1 helping them get out from under their home, and 2, we help soften the blow to their credit, which will allow them to purchase another home in a shorter time span (helping to insure future buyers in the market).

Hi Cheryl,

I've gotten same question from other agents and frankly, there have been moments when I've wondered WHY I DO short sales! But I really do love helping people and I've learned so much in my short sale training that it's helped me with my non-short sale clients. If the economy were different, I might be tempted to do easier deals, but I'm grateful that I can do them right now.

Erika

It sounds like this agent doesn't have much experience with short sales. Education will lead to patience in his case. Otherwise, he probably needs to re-think his career.

To Cheryl:

Thank god I took the time to learn short sales. I love doing them because I love helping clients avoid foreclosure. I don't worry too much about how long they take as much as I do keeping them coming in the pipeline. As long as I close so many a month - and refill the pipeline on the incoming side - I've got a nice steady business.

To the broader audience:

If you're an agent who's located in the DFW area and you'd like to refer your short sales to me, I'll gladly give you an appropriate referral fee!

Oops. Didn't realize I wasn't logged in when I left the previous post ;-)

To Cheryl:

To the broader audience:

If you're an agent who's located in the DFW area and you'd like to refer your short sales to me, I'll gladly give you an appropriate referral fee!

Best,

Kent

I LOVE Short Sales!!! As a listing broker it sure is funny how buyer agents hate to wait for lender aprroval on the sellers side. The tides have turned!!! No more working with BAs bringing me unqualified buyers. I now have thebest pricedlsitings on themarket. If your buyer doesn't have cash just move right along. Sorry but it feels good to be in complete control of the transaction again.

I love short sales. I love short sales. Might as well as time goes on SS will probably be the market.

I think you are right and I refer all my short sales out! Hats off to you! I would have to become a complete short sale expert if I dabbled in that market and nothing else. I defer to the experts but that doesn't mean I can't bring the buyer in on that side of a short sale ;)

Wishing you well!

To be successful in business you need to adapt to the times. I have been handling short sales successfully and don't mind the extra work. I like it when other agents don't want to deal with them as it just means more of the pie for me.

Cheryl, there's an old saying that goes..."you snooze, you lose!" So let them keep "sleeping" on short sales and they'll continue to lose out on great opportunities to build their business, develop their brand and help many home owners in the process.

it looks like short sales are something we all need to get use to for some time

we have some weird things with Myrtle Beach short sales recently

MAR

If it wasn't for short sales we would not be able to sell anything in this market. ( except for REO's ) so might as well adapt with the times.... I don't like siting on the phone for hours and sending 3, 4 times the paperwork just to be told is not there .... but I like a paycheck and we simply can't let every home end up in foreclosure. I don't particularly enjoy doing bpo's but it a tremendous opportunity to keep in touch with what the market is doing on daily basis and analize the trends. I am going to gain valuable information. and who knows maybe start listing REO's

Cheryl, yea and some of the lenders/banks think they are "too good" to follow industry protocol, regulations, and even laws.... some don't even care about exercising good faith! ;(

MAR

Cheryl,

Those are the people who, if they had a bag of gold, would complain about how heavy it was while they were taking it to the bank!

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