Short Sale - Is it the KISS of DEATH?

It will be interesting to check back and see what people say about this.

Tracy, I have had a couple experiences in Short sales and they have been horrible.  The listing agent wouldn't call me back, she said she was on vacation with no working partner as a back-up and when she did call me back, she said to send the contract directly to the seller.  I never did hear back, I tried to contact the agent, she said if they "choose" my buyers' contract, they will let me know, however, it may be a few months. 

This was the worst experience I had, and I ended up loosing my buyers' as they bought a FSBO. They were frustrated as well.  They couldn't wait for months. So, yes, I do try to avoid "short sales" if at all possible.  Now, I have called listing agents of short sales, and they say they have better relations with the seller/bank.

I have heard horror stories about negotiating short sales with banks... that it takes a lot of time, both parties frustrated and all of that jazz.

 I noticed that people don't understand that in fact, a well negotiated short sale can be beneficial to both buyer and the seller. There is nothing better for a distressed seller to avoid foreclosure, and for a buyer to get a good price.  

I know that lenders have to see proof of "burden," meaning that the seller has to be in a financially distressed situation with other debt. From what I know certain lenders will not approve a short sale until seeing the figures. That makes it a risky deal to be involved with, since it is uncertain. 

 I do understand why a lot of agent don't want to touch short sales, but i believe that education is the key. Sure there is a lot to deal with. I will show short sales, I don't have a reason not to do so. When I look at them I think- I can educate my buyer and tell them that it may fall apart, and it may not its all up to the bank. Who has more to lose my buyer with plenty of inventory to choose from, or the seller who is facing foreclosure. 

I am still exploring the subject, I like the "dark" aspect of this business. 

Short Sales can be the kiss of death - but they can also be profitable. If you price your listing well - people will want to see it, even if their agent does not want to be bothered. My only suggestion as a listing agent is to know how to qualify a seller to see if they will even be eligible for a short sale.

I will admit that I call all short sales before I show them and speak to the agent. If they do not seem to know what they are doing I will not show the home.  If they seem to have actual knowledge of what is needed for a short sale I will show it.  Although even with experienced agents and true hardship cases short sales are not always accepetd.

Quick question:  Is it a short sale because the house is worth $20,000 less now assuming you dropped the price?  Or is it because the house is not moving at $20,000 higher.  If the house still has value with a $20,000 more price, have you considered marketing as a buydown (3-2-1) or (2-1) It will take less money and you still may get the buyer to pay for it.  In some cases if the buyer is willing to do a 1 year Prepayment penalty or increase the rate a little the lender can pay for it.  Your seller keeps price integrity and a lower payment is really what a buyer cares about.  Now if you can't get the $20k more simply because values have dropped then yes you are in Short-sale land.   I can get them a buyer pre-approved, regardless of bank and walk you though it.  I outsourced short-sales myself so I know the "lingo".

Susan some agents will not show a short sale because their buyer client needs to move quickly. If someone has the time to deal with it I will show shorts. In fact I am showing one Saturday.

Susan

Market the heck out of it.  Buyers are looking for VALUE!

Do your CMA, then talk with the lender, with market data in your hands, including the number of REOS and shortpays in the market now, last month and June as a trendline.

Email me off list for more ideas.