Top 3 Reasons that Short Sales Fail

By
Services for Real Estate Pros with Great Lakes Home Solutions, Inc.

Top 3 Reasons that Short Sale Fail

I'm often asked during my short sale con-ed course "What are the top reasons that short sales fail? You must be able to see certain trends - what are they and what can I do to prevent them?" This is an excellent question! I've actually come up with 70 reasons that short sales fail, but let's focus today on the top 3.

I see all 70 over and over, which explains why the national average for closing short sales is only 10%. I've also personally made about every one of those 70, but have learned from those and have since improved my team's closing rate to about 85% over the last 6 months (we're so proud!).

On to the top 3...

#1 is pricing your listings too high. There's no excuse for this and pricing too high creates so many problems (long days on market, less motivated buyers, the bank thinking it's worth more than it is, etc.).

#2 is not being focused on the "process" that's involved with short sales. Which step are you on? What's next? What's after that? Are you driving the process forward, or are you just along for the ride?

#3 is failing to justify the offer value to the bank's BPO agent or appraiser. Maybe this should be #1 - I'm shocked at my con-ed course how few REALTORS® realize the importance of this "secret".

For a complete list of 70 reasons short sales fail, check out click here

Not all of these can be prevented, but many are at least partially (if not completely) in your control. To prevent the ones you can control, it's crucial to get yourself educated or delegate to a team that you trust and that can perform (was that too shameless of a plug?)

Dedicated To Your Success,
Joel

Short Sale Negotiations: you earn FULL COMMISSION and no fee to buyer/seller - www.GreatLakesShortSales.com

Comments (3)

Charlie Ragonesi
AllMountainRealty.com - Big Canoe, GA
Homes - Big Canoe, Jasper, North Georgia Pros

Reason number 4 there really is little incentive for a bank tro sell short iof they are part of the SLA risk sharing pool

Mar 16, 2010 12:20 AM
Joel Zieve
Great Lakes Home Solutions, Inc. - Grand Rapids, MI
#1 Michigan Short Sale Team

Charlie - that's a great point, but for some reason, I have not run into this at all.  When I present a reasonable offer from a qualified buyer, I get them approved (85% of the time over the last 6 months).

The bulk of those 70 reasons (if you read the whole list) are mostly dependent upon what the seller and the person negotiating the short sale have control over.

Mar 16, 2010 12:38 AM
Jay Schmitt
Keller Williams Keystone Realty - Gettysburg, PA
Gettysburg Real Estate Agent

Very good and helpful information you have provided in this blog. Thanks you for sharing.

Mar 16, 2010 12:41 AM