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Why Not Do Short Sales?

By
Real Estate Agent with Re/Max Premier Realty, Inc.

Why do so many owners and real estate agents ignore the short sale solution and let a property go into foreclosure? I realize that many sellers are not aware of the short sale solution, or they believe the lender would not forgive such a large amount of debt. I also find that many sellers are in such a quandry they do not see the forest for the trees because their lives are currently in a distressed state.

If more agents would get involved and educated in the short sale process, we as a group of professionals could change the foreclosure statistics drastically in this country and help heal the ailing real estate market, one distressed seller at a time. So many agents seem to be afraid to get involved because there has been such confusion and so many horror stories. Things are getting better. Classes are available. One of the best that I have found is the CDPE class, If you now want to make a great living in real estate, (and who wouldn't) and become a local hero in your market by helping stranded sellers, take the class and run towards the short sales instead of away from them. Don't treat it like the real estate plague! Its more like a cure for the ailing housing market.  Any homeowner would surely rather have a short sale than a foreclosure on their record and any neighbor of that seller would rather have a short sale in their neighborhood than a bank owned property.

If you are an agent that just doesn't want to do short sales, there is still a way you can help heal the market and make some money for yourself. Refer your contacts that need to be short sold to an agent who specializes in them. Surely there is one in every market.

 

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Show All Comments Sort:
Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

We cannot ignore short sales.  They are a significant percentage of our market.  Few of the listings sell, however, because (1) the agents are incompetent and (2) the banks uncooperative. 

 

Jun 24, 2009 09:53 PM
Dick and Dixie Sells
Sells Real Estate, LLC - Trinity, FL
Realtors, Tampa Bay Florida Homes For Sale

Our market has a large percentage of short sales and they must be dealt with. Not for the faint of heart, but when you can help a family avoid the foreclosure route, then it does your heart good! We must remember that when you are working a short sale, especially as a listing agent and also as a buyer's agent that you are holding a person/family, a real person's future financial outcome in your hands. If you can not handle it , refer it. You can sleep better. Just my opinion.

Jun 24, 2009 10:18 PM
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

Short sales require patience and experience. Buyers and agents should be patient.

Jun 24, 2009 10:32 PM
Sally K. & David L. Hanson
EXP Realty 414-525-0563 - Brookfield, WI
WI Real Estate Agents - Luxury - Divorce

Agents don't like to do them because to do them correctly takes much more time....effort and you should spend the money on the training...we have....we have a team and we love them and can feel as though we are giving back to the profession, the communities and the sellers.  You are very right...if you haven't had the training and successful experience...just say...Refer.

Jun 24, 2009 10:57 PM
Fernando Herboso - Associate Broker MD, & VA
Maxus Realty Group of Samson Properties - Clarksburg, MD
301-246-0001 Serving Maryland, DC and Northern VA

Our short sales are ON FIRE. . banks are calling us now. . and one bank simply asked us to reduce the asking price to see if we can get an offer. . two years ago we were begging them!

Jun 24, 2009 11:03 PM
Chip Jefferson
Gibbs Realty and Auction Company - Columbia, SC

In short I dont do them because the banks drag there feet and lie. Life is too short to have 200 hours in one transaction.

Jun 24, 2009 11:49 PM
Harry F. D'Elia III
WEDO Real Estate and Beyond, LLC - Phoenix, AZ
Investor , Mentor, GRI, Radio, CIPS, REOs, ABR

Banks have to get on the bus when it comes to short sales to reduce this industry problem and get the country back on track.

Jun 25, 2009 12:36 AM
Mark Watterson
Salt Lake City, UT
Utah Real Estate

I work short sale listing extremely hard.  Bank are just soooo uncooperative and getting worse.  Now appraisers are killing the deals after fighting for bank approvals.

Jun 25, 2009 12:38 AM
Anonymous
Nancy Deichman

When our team first started listing short sales, they were hard and many of our deals fell through, although we did eveventually close on them, sometimes two or three buyers later.

We took some classes, still listed more and more, and now we are having about 10 short sale closings per month. I am not saying its easy, but there are several steps that can be taken to make the transaction go much smoother. 

1. Make sure the seller is going to cooperate from the beginning. We have released a few. We now have a "catsh and release" program. We will list it, but if they don't fill out all the necessary paperwork and provide the other documents quickly, or if we cannot gain easy access for showings, we "realease"them back into the wild.

2. We make sure the buyer understands the process and has realistic expectations at the time of contract. We also make sure the offer is realistic enough according to comparable sales that it will likely be acceptable when the appraisal or BPO comes back to the lender. If not, we have the seller counter the offer.

3. We provide comparable sales to the agent or appraiser and a market study of the neighborhood.  Many of the appraisers are from out of town and need our help. We approach them very politely and let them know we are trying to help.

4. We provide any helpful information to the lender up front. Market studies, how many homes in the neighborhoods are in preforelcosure status, pictures of any damage or deferred maintenance to the home, etc. Pictures can be very helpful. Mapping of foreclosures and short sales nearby, etc.

5. Lots of communication to the lender. Sometimes it is the slightest little thing that causes them to close a file. It may be something that you provided before that they lost, or some other reason that you can easily correct.

We learn a little more each day, and we do see some improvements in some lenders. We also have a worst performing list. We warn the buyers and sellers up front of these lenders so they don't come screaming later. We have had our share of that. Education to all parties is a big thing.

 

Jun 25, 2009 01:28 AM
#9