Buyer of 1031 exchange got the house he really wanted through short sale, but took on tremendous risk

By
Real Estate Agent

There're some short sale listing agents out there who take the listing just because short sale in their areas is the only game, but they don't know a thing about what to do and how to do it. 

I recently "coached" a colleague who represented a buyer who was very, very interested in a particular short sale listing because of the price and the deemed immediate equity.  Problem is, he was in a 1031 exchange and was running out of time to identify 3 properties. My first advice to my colleague was - "pass this one, you don't have the time for this". But her buyer wanted to stick around even though the listing agent didn't seem to know what to do.  Adding to the frustration was that this was my collague's first ever short sale transaction.  So many times she would call me frantically and asked me "what documents to ask to see from the listing agent", "what cost items must be on the estimated HUD1", "what happens if they find out more liens after the HUD1 was sent to the bank", or "what should I expect after the contract was ratified by sellers?", etc. We would be on the phone for hours.  And speaking of devil, multiple judgement liens were discovered after the bank approved the estimated HUD1 because the listing agent failed to review the preliminary title report (which would reveal the possible existence of judgement liens) and instruct escrow officer to research the issue. Luckily the bank acted very quickly to modify the approval terms, because it was Litton and Litton was bought by Ocwen at that time.  The negotiator just wanted to close the deal before the merger occured. 

I didn't get paid in any ways, rather I felt the need to help her because we're colleagues (together we could help the market).  It's crucial that both short sale listing agent and selling agent must have the necessary knowledge and experience to hold client's hands through this uncertainty.  And listing agents who lack of necessary training would do their clients a service by referring them out to adequately trained short sale specialists, especially CDPEs.

 

Comments (3)

Elite Home Sales Team
Elite Home Sales Team OC - Corona del Mar, CA
A Tenacious and Skilled Real Estate Team

Yes it is important to have the skills necessary to actually complete the job.

Sep 03, 2011 07:48 PM
Ronald DiLalla
Century 21 Discovery DRE 01813824 - Anaheim, CA
No. Orange Cty Real Estate

Hi Deborah, very nice of you to assist a co-worker...thanks for sharing.

Sep 03, 2011 07:53 PM
Pacita Dimacali
Alain Pinel - Oakland, CA
Alameda/Contra Costa Counties CA

Deborah

That was good of you to help your colleague, but hopefully your colleague has seen how important it is to have the right skills to work a short sale and will take action to learn. How to learn? Become a CDPE, attend seminars, read up as much on short sales, offer to help short sale agents with their transactions.

More short sales are coming up. She better get on the ball!

Sep 03, 2011 09:46 PM