The 5 Biggest Short Sale Mistakes a Realtor Should Not Make

By
Services for Real Estate Pros with Jaycee Realty, Inc.

Through processing over 450 short sales, I figured it would be worthwhile to share some of my experiences relating to the 5 Biggest Short Sale Mistakes a Realtor Should Not Make.

1.  Don't Hire an Unqualified Professional to Facilitate or Negotiate with the Bank
I can't even begin to tell you how many times our office has received a request to process a short sale which has been previously "worked" by another individual or entity.  When our office receives such a file the first thing we do is check on the status with the bank (after we receive proper authorization).  9 times out of 10 the most recent follow up on the file was greater than 30 days prior to our receipt of the file.  If a Seller is relying on a professional to work on the short sale, shouldn't they be "working the short sale?"  To make matters worse, sometimes these professionals take money up-front to work the file.  Is this right?  Is this abusive to the distressed homeowner?Is this legal (In some states no it's not legal)?

2.  Don't Pay any Upfront Fees for Someone to Facilitate a Short Sale
This one is kinda' sticky.  Notice how I use the word "Facilitate" which is dramatically different than "Negotiate".  If you are looking for someone to Negotiate a short sale agreement for you, then you are more than likely going to use the services of any attorney (in Florida).  In this case, an attorney may require a retainer fee which is usually paid up front.  IN MY OPINION THIS IS FINE AND IT'S OK TO PAY AN ATTORNEY UP FRONT (check local laws to confirm).  In all other circumstances however, once the Facilitator (one who pushes papers and follows up with the lender) is paid to "work" the file, what incentive does he/she have to get the file closed?  In all of the transactions we have ever Facilitated we have never charged any upfront fees whatsoever.  If a deal does not close, we don't get paid -- it's that simple.  The only party entitled to payment up front is an attorney if he is Negotiating and if he's providing real value (i.e. - Staying a foreclosure or negotiating on a workout etc.).

3.  Not Being Proactive or Doing Nothing
If you don't follow up on a consistent basis with the bank representative handling the short sale request, you will go nowhere V-E-R-Y S-L-O-W-L-Y.  You should follow up with the bank no less than one time per week and often times several times per week.

4.  Rolling Over and Taking No for an Answer
Over the past 3.5 years we have communicated with many of the major banks office of the President.  Why?  Because we received a "no" from the loss mitigation department regarding a short sale or the loss mitigation department stalled in reaching a decision.  In the spirit of reaching the top decision maker at the bank(s), we have reached out the the president's office at:  Bank of America, Countrywide (when it was separate from B of A), Wells Fargo, Chevy Chase, National City (before PNC) and many others.  You'd be surprised how often we have gotten a bank to respond quicker and/or reverse a decision previously made.  This method is highly suggested but should be used sparingly and only when justified as you don't want to be characterized as "the Boy who Cried Wolf."

5.  Trusting the Other Agent
This is not meant to offend any Real Estate Professionals (only Real Estate "un" professionals).  It merely points out that the Agent (usually the Listing Agent) is trying to protect the interests of their respective client/customer without regard to the other side of the transaction.  Use caution when speaking with "the other side".  Ask specific questions that don't require a simple "yes/no" response.  When you are able, follow up with independent investigations relating to the Agent's statements.  And most importantly, if the Agent gives you a timeline of when to expect an event to occur, CONTACT THE AGENT TO FOLLOW UP THE DAY AFTER THE EXPRESSED TIME FRAME.

While I like to keep my postings on the short side (no pun intended) there are several additional Short Sale Mistakes a Realtor Should Not Make.  I'll review those in future postings.

Posted by


Rick Schuster

Licensed Real Estate Broker - Jaycee Realty, Inc.
Licensed Title Insurance Agent - Home Guardian Title, Inc.
Licensed Mortgage Broker - Leading Edge Mortgage Corp

2101 NW Corporate Blvd, Ste 211
Boca Raton, FL 33431

561-206-2835 - via Google Voice
561-988-2546 -Fax
       

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Re-Blogged 1 time:

Re-Blogged By Re-Blogged At
  1. Charles Stallions 04/04/2013 09:24 AM
Topic:
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Location:
Florida Palm Beach County Boca Raton
Groups:
Active Rain Newbies
Realtors®
All Things Florida
Short Sales Specialists
Short Sale REALTORS®
Tags:
foreclosure
distressed property
short sale
short sale specialist

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Rainmaker
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Brian L. Sirota, Esq.
Bristar Realty (Realtor/Attorney) - Orange, CA
For Solutions: (714) 501-7660

Right as rain, Rick.   Generally, a request for advance fees may indeed raise a red flag.  

If possible, a distressed homeowner should consult an attorney and accountant.   A free and recommended option is to contact a HUD approved counselor.   www.hud.gov.  

In California, a broker may receive an advanced fee to negotiate a short sale if they meet certain requirements.  Among them:  1) An advance fee contract needs to be approved by the Department of Real Estate; 2) fees must be handled in a client trust account, and 3) and disclosure of fees must be made during escrow.   If disclosures are made outside of escrow, it's a red flag.   

Also, in California, an attorney may negotiate a short sale.  Brian

 

 

 

Dec 02, 2010 09:09 AM #1
Rainmaker
247,997
Matt Grohe
RE/MAX Concepts - Des Moines, IA
Serving the metro since 2003

Rick: Thanks for sharing your insight. 450, that's a lot!

Dec 02, 2010 02:51 PM #2
Rainer
51,292
Rick Schuster
Jaycee Realty, Inc. - Boca Raton, FL

Brian -- thanks for the info on California -- VERY INSIGHTFUL and thorough!  Also, great point regarding a HUD approved counselor at www.hud.gov.

Dec 03, 2010 12:08 AM #3
Rainer
51,292
Rick Schuster
Jaycee Realty, Inc. - Boca Raton, FL

Hi Matt:  Thanks for reading and commenting on the post.  Rick.

Dec 03, 2010 12:09 AM #4
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Rainer
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Rick Schuster

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