Rethinking How We Advertise Short Sales

Phil- I think you are totally right, and I am going to change all of my short sale listings to reflect that....

For the most part in our area we do not advertise them per say as short sales or as foreclosures. Its either the agent that says something or the client finding out by default somehow!

Our MLS has a Yes/No field for the disclosure of a short sale... but it is a required field, NOT optional... and I am thankful for that.  There are even fines for misrepresenting a listing.  It makes it so much easier/less time consuming to find the types of listings that I'm looking for on behalf of buyers I work with as I've had a few that definitely don't want to be shown any short sale listings -- usually because they're in a hurry and/or simply don't want to wait what is usually weeks/months with no response.  If that were an optional field, you'd have to hope that the listing agent does the right thing and mentions it in the remarks field so you don't have to waste your time calling to verify.

While I agree that it sounds better/less desperate to say that the "sale is subject to 3rd party approval" and leave it at that rather than plaster "short sale" 1+ times throughout the description -- the fact remains that agents working with buyers will likely still use the term "short sale" when they talk about your listing with prospective buyers since stating "subject to 3rd party approval" may lead many buyers to ask the question "what does that mean?".   ...sigh...    I can tell you I've had that question posed to me multiple times.

I forgot to mention that the worst offenders are the listing agents who use the public remarks field of the listing ONLY to state that it's a short sale subject to 3rd party approval followed by the usual disclosures about commissions may be reduced and that they'll be split 50/50, must use the attachments, etc.  Then write absolutely nothing, nada, zip, zilch about the property itself and oftentimes only include the one mandatory photo, sometimes shot with a cell phone camera that delivers tiny photos. Amazing!  They know nothing about how to market properties.

J. Philip - I don't lead with the fact that it's a short sale (though I do advertise that standard sales aren't short sales!).  However, we do have to put it in a specific category in the MLS so it shows in the listing whether it's standard or short sale.

Phil, you're absolutely right on with this blog. As soon as we call them "short sales," buyers and buyer agents immediately treat them like REO and bank owned properties.

Short Sales make up about 20% of my counties sales.  I agree with your thinking.  In our MLS if you don't disclose to coop agents that the commission offered in the MLS is 'subject to' lender, or third-party, approval, the listing office can get stuck for the entire discount if the lender(s) require(s) one.  Our MLS forms a unilateral contractual agreement to pay the commission stated in the MLS to the coop office unless otherwise stated in the MLS.

I'm in between right now: I have a listing right now which, if it does not receive an offer close to the listing price, will in fact become a short sale. The lender and I are working right now to get a lower sales price on the listing that will clearly make it a short sale. In the meantime, I have not made any change on the MLS.

I agree with Lyn that agents who handle the short sales over here in Chicago generally don't do a full market approach and exposure but one simple outside photo and then just blasts everything ... "deal for the block" ..   I came to the conclusion that it does disrupt the seller's life and is hard on them let alone have the Short Sale verbage flying across every other line.  We are to get as close to market value as we can for Short Sales and I think it doesn't do a service for the sellers at times.

 

Philip ... I agree!  Disclosure is one thing, running up the red flag and capitalizing on the perceived weakness!

Philip, even though I agree with you on short sale disclosure, I would say, today's buyer wants bargain - weather it's a short sale or not! And at times, it's driven by the agents who seem to be protecting buyer's interest and making an offer far below market value - just to take a chance - short sale or a regular sale.

The best we can do to represent the seller depends on what seller wants. I can understand your view point on prospective sellers, but it is equally important to do the diligence to current seller.

About the disclosure: In MA, we have three options - yes, no and unknown but if I know it is a short sale, it will be unethical for me the check the last option.

CA - must disclose short sale, there was just a trial, and not disclosing costing the listing agent a claim against their E&O.  Don't we have to disclose what we know about a property?  A short sale is not simply subject to 3rd party, it's a lengthy drawn out process with no guarantees.  there is also no guarantee the seller will move out at COE - then what?

It is a difficult market for the seller of distressed properties.

Hi J Philip,

In my area the disclosure is required.

In my own search system, short sales are flagged. They can be excluded from any and all searches.

Fair or not, that is how it is.

Good post

Phil

Good morning, Phil......we do very few short sales, but we do disclose that the property is in a short sale status with bank approval needed.....it's a time consuming process and the buyers need to know that the answer will not be there in days....the buyer may not have the privilage of taking that time.

Short sales seem to be the best thing and the worst thing about the current real estate market.

How long have you been putting candle holders and your deer taxidermy plaque in the fireplace?

I agree that it upsetting for the homeowner, so just making a note on the MLS is enough for me to tell the buyer. I noticed on a For Sale sign the agent put a rider in bold RED color short sale.. My first reaction was wow.. I wonder what the neighbors must think of them .First, its very difficult for the homeowner to interact with them after seeing that. Now no one needs to ask them why are you moving.. I can't afford to pay the mortgage. I just think it could have been done a little better.

Phil,

     I am truly done with short sales and their processes.  Remember when we figured out that Section 8 was welfare for the rich disguised as helping the poor?  Shortsales are nothing more!  Isn't it nice that the banks will forgive debt.  Why would they do that?  Beccause they are covering up their mess.  They lent money that evaporated with the bullshit values they helped create.  This is nothing but a shortcut to make sure they save on the forclosure process disquised to help poor consumers.  PLEASE, I am so done.  Let, no MAKE the banks take them back and sell these distressed properties.  Ever agent knows that the amount of labor an agent puts into the process of a short sale is US getting ripped off. 

Sorry, but I am so done with it and we all need to be!

GIVE US BACK OUR INVENTORY!

FREE THE SHADOW INVENTORY!

Interesting comments, we have to check the appropiate box on the listing indicating that it's a short sale. I have seen some short sales properties priced low to create an auction.

Jacqueline Drake CRS

Cochise County AZ

I like the terminology "subject to third party approval" over short sale.