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Should they stay or should they go? Why are short sales vacant?

By Joetta Fort

Real Estate Agent with The DiGiorgio Group

September 18, 2010 01:46 AM

short sales homes between denver and boulder I have a question for real estate agents who list short sales: Do you recommend short sellers stay in their home or move out?

And a follow-up question: Does it make a difference if there is a '3rd party investor' involved?

The reason I ask, is because I always wonder where people went when I show a vacant short sale. I've seen vacant short sales all over Jefferson County. Since the house hasn't been foreclosed yet, why don't they stay in it and take care of it?

I realize some people have moved for the sake of jobs. This has happened to one of my clients. But other than that one time, my clients have always stayed in the home until it sold.

When the short sale home is vacant, the owner is usually still living somewhere near by, in someone's basement or a much smaller apartment paying more than it would cost them to keep the power and water on and keep the house insured.

Then recently I had a phone call from someone who's house was listed as a short sale with another agent. They had moved away for a job, but then the job was lost so they called their agent to tell him they were moving back in to the house while it was for sale.

He told them that they might as well take it off the market if they were going to move back in. So they did.

They'll re-list it, with *someone* who's a little more understanding that circumstances change.

But I'm really curious what reason could this agent have had for taking this position?

If agents want the house vacant, do they then go by and check to make sure no vandalism has occurred, or worse?

Do they tell the sellers that if they vacate the house they can't do a HAFA short sale? (I'm pretty sure I know the answer to this, since so few agents even know what a HAFA short sale is, or what the advantages are to sellers.)

Short sale listing agents - what do you advise your clients?

* * * * * * * * * * * * * * * * * * * * * * * *

I write posts on real estate issues and local events in the Denver metro area, especially those *communities between Denver and Boulder, as a public service. My hope is to give people an idea of the 'flavor' of our community, in case they're new or moving to the Denver area.

I am a residential real estate agent, happily helping folks buy a house or sell a house in the beautiful and friendly *suburbs northwest of Denver.

*Arvada, Broomfield, Lafayette, Louisville, Superior, Westminster; also Thornton, Golden, Wheat Ridge, Northglen, Lakewood

Find Homes for Sale, no Matter Who Listed Them, at Dream House Hunting.

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Roy Kelley

Retired - Gaithersburg, MD

If they do not have to move for relocation or other reasons, they are better to stay in the home. It takes a lot of time for the foreclosure process.

Blooming for home buyers.

Sep 18, 2010 01:48 AM

Sybil Campbell

Fernandina Beach, FL

Referral Agent Amelia Island Florida

Joetta ~ I hate to see a vacant house that is distressed. Many times they are easily accessed by vandals. I recently showed a bank owned home. The door to the walk out basement was not secure.

Sep 18, 2010 01:49 AM

Carol Zingone

Berkshire Hathaway Home Services Florida Network Realty - Jacksonville Beach, FL

Global Realtor in Jax Beach, FL - ABR, CRS, CIPS

Roy is correct - many short sale homes that are vacant show horrible, and only depresses the value in Realtors and byuers minds when they visit.

Sep 18, 2010 01:50 AM

Silvia Dukes PA, Broker Associate, CRS, CIPS, SRES

Tropic Shores Realty - Ich spreche Deutsch! - Spring Hill, FL

Florida Waterfront and Country Club Living

Joetta, I would people to stay unless their circumstances dictate otherwise. I agree, most people including agents don't know about HAFA.

Sep 18, 2010 01:56 AM

Larry Story ALC

Total Care Realty - Greensboro, NC

Beneath it all is the Land, Covering all of NC

Joetta,

I always advise my short sale clients to stay in the home. In some cases though they are afraid of being able to find a place to live once the short sale is closed because of their credit. So when something comes up they generally will jump on it. However, they need to understand that the bank expects them to take care of the home until the sale is closed. The HAFA program in which they can get money for moving in some cases up to $3,000 they must stay in the home and take care of it.

Brian Rugg

Rugg Realty LLC Sun City Texas 512-818-6700 - Georgetown, TX

Sun City TX Real Estate - Georgetown, TX Real Est

Hello Joetta:

Interesting question on why people have moved out if they still need a place to live. Advice fro the other real estate person to take a home off the market just because the owner want s to re-occupy make no sense.

Roger Johnson

Hickory, NC

I agree that short sale sellers should stay unless they have a valid reason for moving. I'd like to hang out and see what kind of response you get.

Sep 18, 2010 02:16 AM

Doug Rogers

RE/MAX Coastal Properties - Destin, FL

Your Real Estate Resource!

Make sure the sellers inform their insurance company that the home is vacant. Also be firm and require the seller to leave utilities on as well.

Sep 18, 2010 02:43 AM

Joetta Fort

The DiGiorgio Group - Arvada, CO

Independent Broker, Homes Denver to Boulder

Roy - that's the way it seems to me, too. So I'm still confused why so many short sales are vacant, and why that agent might have reacted the way he did.

Sybil - we need to take care in those vacant homes, with an unsecured door like that one you don't know who you might walk in on!

Carol - to tell the truth, short sales that are occupied often show poorly too, because the owners are depressed and frustrated and at their rope's end. I've been wondering if someone would say they advise their clients to move out for that reason, but no one has so far.

Silvia - I embarked on my first HAFA short sale with great optimism, but the second lien holder has made it impossible. So, back to a 'conventional' short sale model we go. Dang!

Larry - that is the first good reason I've heard for people to move out, and a true one too. I always worry about where people will go when the deal finally closes.

Rugg Realty - Yes, I'm still mystified about that one. I don't think the agent really knew what he was doing, there were other signs of that too.

Rogeer - if you hung out long, you were disappointed! I would have liked some alternate responses, but I guess that's not to be.

Doug - Amen to that! Sellers must keep the insurance up, and keep those utilities on.

Sep 19, 2010 03:02 PM

Todd Clark - Retired

eXp Realty LLC - Tigard, OR

Principle Broker Oregon

I've never understood why you would move out of a short sale if you aren't paying the underlying mortgage. You have free rent, why not save your money and wait until the last possible minute to move. The only explanation I've heard of that I guess is a good point is that their credit is too damaged to find a home to live in after a few months, they want to find a place now when no one will turn them down.

Sep 27, 2010 06:08 AM

It's a mystery to me too. In this case, the agent felt strongly that the house should be vacant for a short sale.

Sep 29, 2010 04:23 AM

Lynn911.com ~ Dallas Real Estate Agent Top Team

Dallas Houses for Rent Dallas Apartment Rentals Lynn911.com - Dallas, TX

Joetta - I am asked this question all the time when property owner wants to rent the deposits here in Dallas are double / triple plus 1st months rent

Enjoy your Labor Day Weekend

Sep 04, 2011 06:29 AM

You too, Lynn!

Sep 05, 2011 01:03 PM

Should they stay or should they go? Why are short sales vacant?

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Joetta Fort

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