on short sales..INSANITY RULES
Author's Added Note: Wow - this hit a nerve! I know its supposed be a fox, but foxes are cute so I chose a wolf. Also the following discussion does not mean we shouldn't help our short sale sellers. Listing short sales is a specialty skill - If you aren't sure how to do it properly, you should consider referring the listing to a specialist. It is all about getting the seller ready for the process. To all you listing short sale specialists....we love you. If we have to show a short sale, the listing agent's knowledge and skill with them is number one in our mind.
Why any agent would bring a perfectly sane buyer (investor or otherwise) into the short sale process is beyond me! (Yes I am guilty) We all know that locked up capital is bad. If we added all the buyers waiting six months for an "inane and uniformed" answer from a national lender on properties the lender (theoretically, desperately) needs to sell, the backlog number would be staggering. We have the economy of a small nation trapped in a process created by the very guys who caused this mess.
If we took all the buying power wasted on this failed process and put it to work in the market we wouldn't have a housing crisis. The numbers would reflect the real will of consumers.
OK, we are guilty as charged. Like any broker, we follow the rules. We represent our clients, and if they must sell short, we work the system. If a buyer insists on buying a short sale property, we present the offer. Then we watch the current process kill the buyer's motivation and harass the seller for more of the "same" information. Ultimately 9 out of 10 fail. Is this our new job? We don't think so!
SHORT SALES ARE A THING OF THE PAST
They are over and done with until banks develop a process to evaluate and promptly review perfectly good offers in a more efficient way. My new rule for buyers is simple -we will not make an offer on a short sale without information from the seller's agent that we can have a 10 day response. Let's call that an approved short sale. Even a complete refusal will be fine. Just tell us now!
VOTE WITH YOUR DOLLARS
If we just say NO to this process --- it will go away. Not a moment too soon. We have no way to evaluate the economic cost of all the lost hours and trapped capital pursuing some worthless effort of buying a property that is in this hell-hole of a system. But we see the results every day. Why not advise our sellers to let them (naturally after talking to a lawyer) foreclose? Let the property turn to weeds and come back 6 to 9 months later to make an offer 35% lower - even if we need gas masks to enter the house, because the lender has turned off the water, gas and all other services.
BUT WE WANT TO HELP OUR SELLERS
I know we do, but what help is it if the bank reserves the right to sue them. Sellers are doing short sales in the misguided opinion that it will reduce the credit score impact and amazingly, because they want to do the right thing. As their broker, you need to tell them it is not necessarily so, and help them get legal advice. They may faithfully execute the effort to sell the house, show it well, and maintain it despite their personal loss. They will still be subject to the legal remedies of the bank. Enough. Sometimes you need to walk away.
BUT OUR BUYERS WANT A DEAL
In order to get a deal you need a party on the other end to agree. Short sale sellers will agree but don't have the authority to sell. Buyers need approved sellers who have done their homework and are ready to deal. This is much better when the bank has already done whatever they are going to do. Dare we say post-foreclosure? BANK OWNED - aka REO. At least at that point a result has been determined.
Our experience is that our clients have a 3 month tolerance for BS. Whatever they liked about the property, in 3 months they will be gone. Not only will they be done with the process but they will rethink whether they even want to buy a property, or play at all... in this bank run game.
JUST SAY NO!
When buyer and seller meet on terms things usually work out. They sort out inspection and other items and meet in the market. Apparently now, the bank is dictating the rules. We, as brokers, can decide if we want to participate with our clients or move them to something better. The days of selling a house and enjoying the happy result for all parties seem dim, but we won't give up.
We represent our buyers and sellers. When we know a process is flawed or even unfair we can just say NO! Eventually our message will reach the banks and legislators and they will end this unfair, disrespectful and inefficient process called "unapproved short sales".
Doug and Lorena