Buyer's Agents Are the Biggest Roadblock to Closing a Short Sale

By
Real Estate Agent with RE/MAX Gold DRE #00697006

garbage cansBuyer's agents are the biggest roadblock to closing a short sale. Buyers, if you've been writing offer after offer on those short sales without success, perhaps it's time to fire your agent. I'll probably get a lot of grief for saying this, but that's the way the cookie crumbles or the pooper-scooper scoops, pick your metaphor.

As a busy Sacramento short sale agent, it's getting to the point where 2 out of every 3 offers I receive for my sellers are garbage. They are not real offers. I'm not talking about the expired preapproval letters, outdated earnest money deposits, or missing short sale addendums, because those are screw-ups that can be fixed. I'm talking about offers from those buyers who have little motivation to wait for the bank to approve the short sale.

Why don't buyers want to wait for short sale approval? Because their agent told them they don't have to. Their agent told them to write as many offers as they can because when they all come back approved, they can have their pick. Why would an agent suggest this maneuver? So the agent can get paid faster. Some agents can't wait months for a commission check because they're not closing deals on a consistent basis. But this is not in the buyer's best interest. This practice is in the agent's best interest. According to the Realtor Code of Ethics, agents are supposed to put their buyer's interests above their own.

If a buyer cannot afford to buy more than one home, a buyer could be breaking the law when writing multiple purchase offers. Does the buyer's agent point out that fact to the buyer? Probably not. Greed and stupidity often go hand-in-hand.

The whining that I get when I call agents on this deception is: "My buyer just wants to buy a home." Well, guess what? My seller just wants to sell a home. Maybe we should put the two of them together? You think?

Some days I am ashamed to be part of this profession. Buyers do want to buy a home, and some want to buy a short sale home. Maybe agents should get out of the way and let them do it.

Photo: Big Stock Photo

Posted by

elizabeth weintraub

 

 

Weintraub and Wallace Realtors

 

 

Elizabeth Weintraub reviews

 

 

 

Elizabeth Weintraub is co-partner of Weintraub & Wallace Team of Top Producing Realtors, an author, home buying expert at The Balance, a Land Park resident, and a veteran real estate agent who specializes in older, classic homes in Land Park, Curtis Park, Midtown, Carmichael and East Sacramento, as well as tract homes in Elk Grove, Natomas, Roseville and Lincoln. Call Elizabeth Weintraub at 916.233.6759. Put our combined 80 years of real estate experience to work for you. Broker-Associate at RE/MAX Gold. DRE License # 00697006.

Photo: Unless otherwise noted in this blog, the photo is copyrighted by Big Stock Photo and used with permission.The views expressed herein are Weintraub's personal views and do not reflect the views of RE/MAX Gold. Disclaimer: If this post contains a listing, information is deemed reliable as of the date it was written. After that date, the listing may be sold, listed by another brokerage, canceled, pending or taken temporarily off the market, and the price could change without notice; it could blow up, explode or vanish. To find out the present status of any listing, please go to elizabethweintraub.com.

close

Re-Blogged 9 times:

Re-Blogged By Re-Blogged At
  1. Missy Caulk 07/23/2010 12:55 AM
  2. Tony and Suzanne Marriott, Associate Brokers 07/23/2010 12:00 PM
  3. Kathleen Daniels 07/26/2010 04:18 AM
  4. Todd & Devona Garrigus 07/26/2010 05:06 AM
  5. Todd & Devona Garrigus 07/26/2010 05:06 AM
  6. Joe Manausa 07/27/2010 11:08 PM
  7. Sally K. & David L. Hanson 07/27/2010 11:13 PM
  8. Jackie Connelly-Fornuff 07/27/2010 11:49 PM
  9. Susan Goulding 07/29/2010 09:00 PM
  10. Chris Ann Cleland 08/01/2010 03:45 AM
Topic:
ActiveRain Community
Location:
California Sacramento County Sacramento
Groups:
California Short Sales, REO's, and Foreclosures
Posts to Localism
Short Sales Specialists
Lyon Realtors
Club Chaos
Tags:
buyers agents
elizabeth weintraub
short sale
sacramento short sale agent
multiple purchase offers
short sale addendums
short sale appoval

Spam prevention
Show All Comments
Ambassador
920,196
Missy Caulk
Missy Caulk TEAM - Ann Arbor, MI
Savvy Realtor - Ann Arbor Real Estate

I agree Elizabeth and the 2nd worst thing is the listing agents, who don't know how to put a package together.

We (our TEAM) now have our own form...the buyer must wait 90 days or no return of EMD. I got sick of buyers walking.

We just had our first BofA approved in 30 days. My first time using Equator.

Jul 23, 2010 12:47 AM #15
Ambassador
942,042
Suzanne McLaughlin
Sabinske & Associates, Inc. (Albertville, St. Michael) - Saint Michael, MN
Sabinske & Associates, Realtor

Missy has the right idea.  We will not return EMD until there is a resolution or the 90 day wait period.  These sales are a lot of work...and the buyer's agents often haven't a clue.  So they can't explain anything to the buyers. 

Just sit back....we'll keep you posted.  And, that multiple offer scenario with multiple properties is a recipe for disaster. 

Thanks for the great post! 

Jul 23, 2010 01:04 AM #16
Rainer
264,127
Bill Travis
Captain Bill Realty, LLC - Gilbert, AZ
Broker/Owner

I'm in the camp that blames the banks.

I'm a buyers agent, and my duty is to my client, not the listing agent, the seller, nor the bank.

I never advise my clients to make more than one offer. However, if they want to continue to look and decide to place another offer, then I must and will follow their instructions, even though it amounts to a lot more work for me.

When that happens, I do tell my clients that if an agent asks me if my buyer has another offer in on another short sale, that I am required to treat them honestly, and will have to disclose that we have submitted another offer.

Jul 23, 2010 01:07 AM #17
Rainmaker
526,728
Dr. Stacey-Ann Baugh
Century 21 New Millennium - Upper Marlboro, MD
A doctor who makes house calls.

I personally find this post offensive as a buyer's agent.  I have never had clients write on more than one property at a time.

 I think the biggest roadblock to closing short sales are the banks that take months to respond.  It is very difficult for a buyer who wants a new home to sit back and wait without knowing whether their offer will even be accepted and so many may want to consider looking.  If the bank made an offer to a buyer and they took 3 months to decide if they want it I bet many banks would go looking for a new buyer too.

I also think not all listing agents handling short sales have a clue what they are doing so we as buyers agents don't even always know whether the short sale is being done properly from the listing end.

Jul 23, 2010 02:19 AM #18
Rainmaker
2,189,557
Elizabeth Weintraub Sacramento Realtor Top 1%
RE/MAX Gold - Sacramento, CA
Put 40 years of experience to work for you

Stacey-Ann, The thing is Cynthia has a valid point. You need to qualify the listing agent before writing on that short sale. If the listing agent doesn't know how to do a short sale, your buyer could be hosed.

And Bill: You are not required to let your buyers turn into flakes. You have the authority to fire them. If a buyer were to tell me he or she wants to write on another property, I would suggest they cancel the first offer to stay out of trouble. It's much cleaner that way.

Jul 23, 2010 02:44 AM #19
Ambassador
602,901
Lizette Fitzpatrick
Lizette Realty - Richmond KY - Lexington, KY
Lizette Realty, Lexington KY MLS - Kentucky Homes

I bet this does happen a lot. I had a buyer ask me the other day to write two offers on different properties. I warned her that she might be buying two houses and that I would only write one for her.

Jul 23, 2010 04:36 AM #20
Rainmaker
627,517
Mary Douglas
United Country Ponderosa Realty, Red Feather Lakes, Colorado - Red Feather Lakes, CO
REALTOR, Red Feather Lakes, Colorado

Hi Elizabeth, Since I haven't done a short sale on either side- this is surprising.  I don't think I would want to write multiple offers, unless my buyer wanted to buy multiple homes.

Jul 23, 2010 06:30 AM #21
Rainmaker
3,052,041
Tony and Suzanne Marriott, Associate Brokers
Haven Express @ Keller Williams Arizona Realty - Scottsdale, AZ
Serving Scottsdale, Phoenix and Maricopa County AZ

Suggested and reblogged - right on the money Elizabeth.  We use a "standard" Counter Offer for terms that scares the flakes away.

Jul 23, 2010 11:59 AM #22
Rainmaker
2,782,770
Kathleen Daniels
KD Realty - 408.972.1822 - San Jose, CA
San Jose Homes for Sale-Probate & Trust Specialist

Elizabeth, I do not understand why this post is not FEATURED! You are so right on here. I wish it were a requirement that agents be trained and tested (a real hard test) prior to being allowed to work either side of short sales.

Jul 24, 2010 10:58 AM #23
Ambassador
1,229,631
Melissa Zavala
Broadpoint Properties - Escondido, CA
Broker, Escondido Real Estate, San Diego County

I'm glad you wrote this post. The other day I commented that in the past year I (personally) have never had any buyer that I represent bail on a short sale during the waiting phase. To me, all that means is that most agents do not explain thoroughly to the clients about the road ahead. SO, I fully agree with you. And... I like the photo you selected for the post as well.

Jul 25, 2010 03:01 AM #24
Ambassador
1,549,863
Karen Fiddler, Broker/Owner
Karen Parsons-Fiddler, Broker 949-510-2395 - Mission Viejo, CA
Orange County & Lake Arrowhead, CA (949)510-2395

Hi.....uh oh, I had to disagree and wrote my own post on the subject of annoying listing agents. I also suggested this for a feature (to make up for it?). I love you, and would love to work with you as a listing agent on a short sale, clearly YOU know what you are doing......but so many agents don't. So....

Jul 26, 2010 04:51 AM #25
Rainmaker
611,303
Todd & Devona Garrigus
Garrigus Real Estate - Beaumont, CA
Broker / REALTORS®

Most buyer's agents do not understand the short sale process. This is not because they don't have the mental capacity for it, but because they're never done one!

Short sales are detailed, negotiation heavy, and require creativity most times to get them closed!

Without the experience forgoes the understanding.

Jul 26, 2010 05:06 AM #26
Ambassador
3,279,684
Debe Maxwell, CRS
www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
Charlotte Homes for Sale - Charlotte Neighborhoods

Hi Elizabeth!  I couldn't agree with you more!  Also, there are the buyers' agents out there who don't pass along our weekly updates to their buyers and the buyers wind up thinking that the process has not even yet begun and tell their agents that they want to WALK!  They have no clue where we are in the process and become quickly discouraged if not updated--it's VERY frustrating! 

We were recently nearing completion on a short sale and the buyer did the same thing--RIGHT when the BPO had been delivered to the bank (I had let the buyer's agent know THAT day), the buyer walked.  Now, why would they walk THEN if they had been properly advised by THEIR agent?  There's only one explanation and that's that their agent did THEM a disservice!

I love working with buyers agents who KNOW what they're doing with short sales!

Jul 27, 2010 03:08 AM #27
Rainmaker
3,238,620
Sally K. & David L. Hanson
EXP Realty 414-525-0563 - Brookfield, WI
WI Realtors - Luxury - Divorce

In a word Yup.......all the objections, less than cordial, professional, polite comments, demands, etc, are always under the guise of "I am a buyer's agent...." which is not a license to be rude...unprofessional...demandng....

Jul 27, 2010 11:11 PM #28
Ambassador
2,738,698
Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

Sad but true.  When a buyer's agent is working without sufficient short sale experience or knowledge, they are merely wasting everyone's time, especially the buyer's time.

I eliminated a couple of agents from my network because they simply wouldn't work the short sale offers in a manner that gave them any chance of lender approval. 

That said, there are far too many listing agents with no short sale experience who throw stuff in the MLS with no hope of success.  Far too many.

Fact is, there is a dearth of agents with real short sale knowledge and experience. 

Jul 27, 2010 11:19 PM #29
Rainmaker
749,948
Jackie Connelly-Fornuff
Douglas Elliman Real Estate in Babylon NY - Babylon, NY
"Moving at The Speed of YOU!"

I have always told my buyers up front that they need to be patient and wait. It's not going to close in 90 days. If it does, we will be lucky. I don't want to waste anyone's time.

Jul 27, 2010 11:48 PM #30
Rainmaker
4,954,280
Barbara Todaro
RE/MAX Executive Realty - Franklin, MA
Marketing Agent for The Todaro Team

my team members have only been faced with 2 or 3 short sale listings.....there are many buyers who do not want to wait the 6+ months to close....that's the only issue....closing time....our MLS provides a place to disclose whether it's a short sale subject to approval by the bank...

Jul 27, 2010 11:57 PM #31
Rainer
15,900
Stephanie Lim
Lim Team with Keller Williams Realty Jacksonville - Jacksonville, FL

Elizabeth--AMEN!!!

As a listing agent who knows how to do short sales I have found that some of the buyer agents are my biggest problem, not the banks (although they aren't a walk in the park either).  We explain the process thoroughly to them at the beginning and that it IS a legally binding contract with a contingency for approval.  If they buyer's agent doesn't seem to "get it" we warn our seller before we go under contract.  Sometimes those who don't get it still slip through.  I've found that if I can keep the buyer on board we almost always get the deal closed.  When there is a good buyer's agent who understands short sales that is easy.  When it's someone who e-mails and calls every day wanting a new update from the negotiator and gets the buyer all worked up and continues to show them other properties...it's hard.

As a buyer's agent we also have to prequalify the listing agent and make sure they know what they are doing if our buyer is considering their short sale listing.  I think it is completely negligent to take a short sale listing if you do not know what you are doing...but I have seen many listing agents in our area who do that. 

I can't imagine the type of disaster you wind up in when neither the listing agent or the buyer's agent knows what they are doing...

Jul 28, 2010 01:59 AM #32
Rainmaker
222,657
Scott Baker
www.eHomeReports.com Coldwell Banker West Shell - Liberty Township, OH
Realtor Homes for Sale in Cincinnati, West Chester, Mason, OH Area

Sometimes, just sometimes the buyers agent understands the short sale process and alllllll the delays that go with it. Sometimes, just sometimes the listing agent is the problem, not the buyer's agent.

Aug 01, 2010 03:51 AM #33
Rainmaker
374,862
Jill Watts
Realty Pro, Inc. - Vancouver, WA
A Luxury Experience at Every Price Point!

I realize my limitations and use a short sale team through our Keller Williams agency. I love the marketing side, and I know that short sales have a lot of nuances and loop holes. So, it's just easier to team up!

Aug 01, 2010 04:43 AM #34
Show All Comments

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?

Rainmaker
2,189,557

Elizabeth Weintraub Sacramento Realtor Top 1%

Put 40 years of experience to work for you
How much is my home worth?
*
*
*
*
Spam prevention

Additional Information