Special offer

Short sale approved...where is truth in advertising when you need it

By
Real Estate Agent with Century 21 Redwood DC-SP98366576

Short Sale Approved !

So, you are searching for a home on line. You go to one of the ten million sites that provide you with "up to date multiple listing service" information.  You have entered the search criteria. You scan through the listings.  Hmmm, it seems there are a lot of short sales.  You go through them one at a time.  Suddenly, magic words appear in the agents remarks.

"Unbelievable Short Sale approved by Bank for $215,000."

If you believe that, you will be left like a wolf howling at the moon

The fact of the lie is hidden inside the kernel of truth.  Lets break down what the agent shares and what is the truth.

Unbelievable

Well, the agent warns you with the first word, all that follows is unbelievable. The next words are probably very accurate, short sale approved by bank for $215,000.  Here is the crux of the matter. The bank approved somebody else and the house is back on the market. You may submit an offer for $215,000, but your offer has to go to the bank and it has to go through the approval process all over again. Just because it was approved once for that price, does not mean that it will be approved again.

I am not sure what is inside the brain of agents that mis-state the truth

but I have a pretty damn good idea

But wait, you argue, there are more just like that one.  You scroll down the screen and point at this entry.

"Short sale was approved at sales price, no closing costs will be approved, other terms and conditions apply, call LA for details."  The home is listed for $190,000.  It sure likes like all you have to do is offer $190,000 and it is a done deal.

Not so fast Grasshopper

When I pull up the same listing, the secret agent remarks tell a little different story. "Back on the market!!! Buyer's financing fell through. Short sale approved! Closing cost help of $5,700 was approved, other terms and conditions apply, call LA for details. Very nice townhouse conveniently located, shows well on the inside and upgrades were made. . Sales price and commission subject to third party approval.Commission will be split 50/50."

Seems like having one lie in your listing is the equivalent of having two lies in your mouth.  The entries do not have the same information and are targeted at two different people that have the same purpose.

Oh, what a tangled web we weave

when first we practice to deceive

Again, the fact that the first buyer fell through only means that they had a contract, the bank may have approved the price and the house is back on the market.  You can surmise anything you like.  The facts remain. Any new offer must go through the approval process. There are no guarantees.

You really have to be careful when searching for a home on line.  Remember the fine print, "information is deemed reliable but not guaranteed."   In the listing above, the consumer reads no closing help available.  The secret agent remarks indicate that $5,700 were approved before. What is the truth.

The only thing accurate in any listing is the address. Sometimes even the address is wrong.  Any listing agent in the State of Maryland asking a consumer to contact them, should be ashamed.  The agent knows before the contact is made that they represent the seller and can not represent the buyer.  Asking an unrepresented consumers to call seems to be borderline unethical.  The listing agent can not do anything for them. The interest of the listing agent is with the owner. I wonder if anyone finds it peculiar that comments can be so opposite on the same home?

Looking at listings on line.

Remember whom entered the listing

And please understand, a short sale approval is transaction related. That means, the approval is tied to a contract. If that contact falls through. The approval process must be begun again with the next contract.

If you would like help, sifting through the information about listings, feel free to call us.  We represent buyers! You are more than welcome to visit our website and view homes.

MacArthur - Tudela

301-509-5111

all rights reserved @ tudela macarthur

Comments(10)

Catarina Bannier
Compass - Chevy Chase, DC
DC Real Estate The Smart And Fun Way

John, I hope a lot of those online shoppers will read this.  I've come across a few buyers who were outright obsessed with the idea of buying a forclosure or short sale property (rather than a "regular" one).  I'm telling people you should look at the house, the location and the price and if it happens to be a distress sale we'll deal with it.  Nothing else makes sense, unless you're just playing around and/or have all the time in the world. 

That said, the only shortsale I ever went through (on the buyers' side) turned out to be a great deal for everybody involved.  The several months of uncertainty, difficult communication with anonymous legal entities and endless waiting were no fun.

Sep 02, 2010 05:06 AM
Rodney Mason, VP of Mtg Lending
Guaranteed Rate NMLS# 2611 - Atlanta, GA
AL,AR,AZ,CA,CO,FL,GA,IN,MI,MS,NC,NV,SC,TN,TX,VA,WA

Short sales buyers must understand that the approval process with take time.  There is no guarantee that they will always likethe end result.  If someone needs to move by a certain date, they should think twice before going after a short sale.

Sep 02, 2010 05:52 AM
Melina Tomson
Tomson Burnham, llc Licensed in the State of Oregon - Salem, OR
Principal Broker/Owner, M.S.

I have had this conversation many times with buyers who think that because it was "approved" it could close like a regular sale. 

Sep 02, 2010 07:20 AM
Dr. Stacey-Ann Baugh
Century 21 New Millennium - Upper Marlboro, MD
A doctor who makes house calls.

This is such good information because so often buyers don't understand that the process starts anew with each contract.

Sep 02, 2010 08:38 AM
Cindy Jones
Integrity Real Estate Group - Woodbridge, VA
Pentagon, Fort Belvoir & Quantico Real Estate News

John I think it depends on the lender.  I've had 3 different short sales approved that went back on the market.  Each time we closed within 45 days with a new buyer under the same terms & conditions as the first buyer.  In one case we got a better offer.  If it is BoA though all bets are off :-)

Sep 02, 2010 10:39 AM
Susan Mangigian
RE/MAX Preferred - West Chester, PA
Chester & Delaware County Homes, Delaware and Ches

I need help and I am a real estate agent!  I can't imagine how the public must feel!

Sep 02, 2010 10:43 AM
Jane Pacheco
Pacheco Realty & Financial Services - Fremont, CA

This just emphasize the need for Realtors to dig into the information that buyers can't read. And calling the listing agent does wonders too (if they answer the calls). This is where we come in and hold the hands of our buyer clients.

 

Jane Pacheco

Sep 02, 2010 11:29 AM
Kay Van Kampen
RE/MAX Broker, RE/MAX - Springfield, MO
Realtor®, Springfield Mo Real Estate

And we all said Amen!  You are right on with this blog.  No short sale is approved prior to receiving an offer.  I have realtors calling all the time asking if the short sale has been approved by the bank at the listing price.  Great post!

Sep 02, 2010 02:32 PM
Cindy Billman, CDPE, SFR
SIlver Keys Realty - Grapevine, TX
MY EXPERIENCE IS PRICELESS!

Thanks for this post because it is so true - my son moved to Florida and put a contract on a house that the listing agent said had already been approved for a short sale- long story short, it had been approved for the previous buyer - it took 4 months to get his offer approved and it was for more money than the precious offer!

Sep 02, 2010 04:02 PM
John Mosier
Realty ONE Group Mountain Desert - Prescott, AZ
Prescott's Patriot Agent 928 533-8142

Pre-approvals of short sale is an oxymoron. The "approval" in this instance is at most a "maybe we will accept it." Final approvals of a short sale transaction are very situation dependent. Once the final approval is given, the lenders put so many disclaimers into their approval letter and even into the Schedule Bs from the title insurance company that the buyer has no real protection.

Sep 05, 2010 05:02 PM