The short sale process and its' deficiencies.

Reblogger Aida Pinto
Real Estate Broker/Owner with Independent Real Estate Broker DRE#00972295

I totally agree with this post....the banks should give us Realtors approved prices before we put it on the MLS.....I bet this would make short sales go a lot smoother and quicker......and everyone will come out a winner.  I never understood why the bank don’t reveal their BPO!

Original content by Cory Fitzsimmmons 014118

This too good not to share.  This is an article written to the editor of Inman News from a real estate agent from Las Vegas.  His response is on point.  Many folks have opinions on "how" our market is doing, but the truth is, those that are on the front lines have the best reports.  The short sale processis tricky and often mis-aligned with no clear protocol to follow AND each bank follows a different protocol. Buyers are often mis-informed or uneducated about how the process works. Mr. LeVine makes some very good points on how this could be changed.

A big thanks for Jack LeVine and his thoughts.  Will we change? Here is the full article:

Short-sale agents, buyers get short end of stick

Letter to the Editor

By Inman News
Inman NewsTM

Re: 'Rising rents and the real estate recovery' May 25

Dear Editor:

There's one BIG change that would make the recovery faster, smoother and more vigorous. Allshort sales should be at preapproved prices. They shouldn't be allowed to go into the multiple listing service until the banks have agreed to the price, terms and conditions -- including and especially how deficiencies and seller contributions will be handled.

Why? Because we have too many willing and able buyers who get their hopes up and then are trapped in a short-sale contract, with slim chances of successfully owning the house. Unless the buyer is in contract on multiple houses, they're out of the market waiting for something that probably won't happen.

Having multiple contracts hurts the sellers, as these buyers are going to drop out as soon as one of their "deals" comes together. Massive time and energy is being spent by real estate agents, with little chance of success.

The strategic default problem would be reduced if the sellers knew that they'd be foreclosed on quickly. They're taking advantage of the prospect of making out better by doing a short sale. They're the most likely to have the banks requesting funds from the seller, or refusal to waive deficiency judgment -- terms that the seller will probably turn down, anyway.

If we knew in advance that the seller was truly qualified for a short sale, that the bank didn't have some other agenda, and was motivated to not get the property back in foreclosure, then I'd be happy to bring my strongest buyers to the short-sale deal. Meanwhile, the real buyers are fighting over the REOs (bank-owned properties), flips and equity transactions, of which there are actually too few.

Prices keep falling because the short-sale agents are listing at 5 to 10 percent below comps in order to try to get an offer, and often are accepting offers at even less. The banks come back at a higher price, and then the buyer walks. The downward momentum has been coming from the short sales, not from the REO listings.

It would be nice if the banks would just do as I suggested, or the government forces them to do it. The reality is that the real estate community is going to have to tell the banks that we're not going to facilitate their craziness any longer.

We'll take the listings, we'll process the short sale to approval or denial, but we won'tput it on the MLS or tie up a buyer, or spend money to advertize and promote it until we know there's actually a huge chance that a closing could take place.

That was the premise, and the promise of the Home Affordable Foreclosure Alternatives program(HAFA), but HAFA has been just as big of a joke as the way we do it now.

Let's only sell houses that can actually, really, truly be bought. If the banks can dictate to us that they won't even consider a short sale till there's an offer, then we ought to be able to dictate to them that we won't look for an offer without a preapproval of the sale.

Jack LeVine
Realtor
Bella Vegas Homes
Las Vegas

_______________________________________________________________________________________________

Cory Fitzsimmons, Kitz & Associates, Inc., Golden, CO 303-238-4734

www.housefitz.com   Denver investment property   Denver Income property 

Your Denver Metro Broker-Associate and REALTOR®  "Out standing in my Field"

Colorado Foreclosure Hotline 1-877-601-HOPE    HOTLINE WEBSITE: ColoradoForeclosureHotline.org

The information contained in Cory's blog is deemed reliable but is not guaranteed, and the opinions and views expressed in these articles are solely those of the author.

SS certified logotwitterlinkedin  facebook

close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Topic:
ActiveRain Community

Spam prevention
Show All Comments
Ambassador
1,730,106
Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Buy Daytona condos for heavenly good prices

Aida,

Isn't it that Banks do not have to do short sales. We ask them, and suggest the price. Why not extend this requirement to all sales and not put a listing in MLS until the bank, financing the  Buyer, gives you the price?

Why not just hang your license and let the banks do everything? The only valid thing here, is that we want them to work and us make money.

What a strange perspective.

Jun 12, 2011 03:49 AM #1
Rainmaker
1,323,495
Chuck Carstensen
RE/MAX Results - Elk River, MN
Minnesota/Wisconsin Real Estate Expert

I dont think the government should force it into reality.  There should be a few trust Realtors or appraisers that immediately do BPOs on them and say this is the price range it should be it to sell and then make it an approved price.

Jun 12, 2011 03:51 AM #2
Rainmaker
151,904
Aida Pinto
Independent Real Estate Broker - Los Angeles, CA
Real Estate Broker (562) 884-6196

Mr. Jon Zolsky, I find your comment rude and mean and it doesn’t make sense. I debated whether to answer your rude comment or just let it go, but I think I will defend my position.  I hope you don’t get offend as much as you have offended me.   

First, I don’t think you know what you are talking about because you got it this post all wrong! You should really refrain from making comments on subjects that you clearly no nothing about.

 

You find my perspective strange because you obviously don't do short sales or haven't been in the business for very long. Yes, it’s the banks choice to do a short sale and there’s a lot of wasted time when a bank makes their policy so complicated. They've agreed to a short sale, no one is holding a gun to their head so why not cooperate with the Realtor.  

 

Mr. Zolsky, I am the one that finds your perspective more whacked than mine: you think that realtors set the price, no we Realtors do not suggest price.....the comparable sales do and ultimately it's the Sellers choice to price a property.  Sometimes banks hire agents who think that by pricing their bpo high they will get more business or get an REO from the lender.  In today's real estate market...Pricing is everything.

 

Jon you said: “Why not extend this requirement to all sales and not put a listing in MLS until the bank, financing the Buyer, gives you the price?”    This requirement is already in place it called “a loan and apprasial contingency!"

Jon.....You also said: “Why not just hang your license and let the banks do everything? The only valid thing here, is that we want them to work and us make money.....”

Sorry Jon, put I can’t work like you do, “hang your license and let the banks do everything” and just show up to pick up the commission check.... is this your MO  and has it worked for you?   I am not an order taker: I am a real estate broker for over 20 years, and every transaction that I have closed, I have earn ever penny of it.  I don’t know what to make of this obviously rude comment.....and I could easily say to you that you must be one of those lazy agents who expects to get paid without working or just an order taker.....but I’m not going to that rude.

How did you come up with this rude comment?Or perhaps you just woke up on the wrong side of the bed this Moring.  I’m sorry that you’re not feeling well.....lol! 

Never in the post does it say that I want the banks to do every thing and get paid for nothing. Working short sales is hard work and in the end sometimes you don’t get paid.....that is the nature of the short sale game.

 

Jun 12, 2011 06:22 AM #3
Rainmaker
151,904
Aida Pinto
Independent Real Estate Broker - Los Angeles, CA
Real Estate Broker (562) 884-6196

Chuck thank your for your input...knowing the price the bank wants sure would help...some times when a buyer makes an offer without knowing the banks price....it's just a shot in the dark....this is no way to do business.

Jun 12, 2011 06:25 AM #4
Ambassador
1,730,106
Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Buy Daytona condos for heavenly good prices

Aida,

I do not understand why you needed to write that to defend the  3 lines you wrote when you reblogged.

It is not about how experienced you are, or else... It is about what you wrote. "the banks should give us Realtors approved prices before we put it on the MLS.....

And why is that they should do it other than make the life of agents easier? And could you please, explain what would be so hard in doing short sales, if you have the bank preapprove the price and all t he terms (deficiency, and money from Seller at closing)?

What is left?

Jun 12, 2011 04:59 PM #5
Rainmaker
151,904
Aida Pinto
Independent Real Estate Broker - Los Angeles, CA
Real Estate Broker (562) 884-6196

Jon....I felt your comment was rude and uncalled for...you don't understand what?  Not all short sales are preapproved...I don't understand what you are arguing about...and giving us price is not about make my job easier....the buyer's are the ones that waste a lot of time waiting for the bank to approve the price...you must not do a lot of short sales and therefore you should refrain from making comments on things you don't know about.

Jun 12, 2011 05:47 PM #6
Ambassador
1,730,106
Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Buy Daytona condos for heavenly good prices

BTW, short sales is practically all I do... for a few years now.

And why is the Bank needs to care about the buyers? If they do not want it, they have choices. Buyers are not the Bank's problem. But it is agent's convenience. But agents convenience is not Bank's problem either.

Their problem is Seller (borrower).

And if you insist that I was rude, please, read my comment again. It is not a personal attack. It is about what you said. And keep saying...

Then read your "defense".

Jun 13, 2011 06:00 PM #7
Show All Comments

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?

Rainmaker
151,904

Aida Pinto

Real Estate Broker (562) 884-6196
Ask me a question
*
*
*
*

Additional Information