"Steering" buyers away from short sales

By
Real Estate Agent with Lattimer Realty

steering buyers away from short salesDo agents realize that they are "steering" buyers away from short sales?

Repeatedly I read posts online and have had conversations with buyers where they say, "My agent said to stay away from short sales" or "my agent won't show me any short sales".  As a real estate agent I list and sell residential properties only and I do not handle commercial real estate.  If my telephone rings or I receive an email from a buyer or seller interested in commercial real estate, I refer them to an agent who handles commercial real estate.  I don't steer them away from commercial properties.  I am not a commercial real estate agent nor do I play one on tv.  It amazes me that an agent who does not handle short sales, is intentionally steering a buyer away from short sales instead of referring them to an agent who does handle short sales.  

I know sometimes a short sale isn't in a buyer's best interest for various reasons but in this post, I'm referring to an agent who is blatantly and intentionally steering buyers away from short sales by telling them to stay away from short sales or refuses to show them short sales, not because its not in the buyer's best interest but because the agent either lacks knowledge of short sales or simply doesn't handle them. 

"Steering is the channeling of homeseekers either to or from particular areas on the basis of race, religion, country of origin, or other protected class" (Essentials of New Jersey Real Estate, Ninth Edition).  Short sales sellers may not legally be defined as a "protected class" but channeling homeseekers a/k/a homebuyers away from short sales sure looks like steering to me

Hey, if it looks like a duck and walks like a duck....

steering buyers away from short sales

 

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Ambassador
2,801,517
Dick Greenberg
New Paradigm Partners LLC - Fort Collins, CO
Northern Colorado Residential Real Estate

Hi Gina - I don't think it's steering, but having a frank discussion with buyers, so that they fully understand what they're going to experience if they want to pursue a short sale, is very much in the buyer's interest. And if they choose not to do a short sale, we're all going to be happier. If they want to go ahead with a short sale, at least they're well-informed.

Dec 29, 2011 04:22 AM #1
Rainmaker
601,437
Donne Knudsen
Los Angeles & Ventura Counties in CA - Simi Valley, CA
CalState Realty Services

Gina - While I most certainly don't steer away my borrowers away from short sales, I do make sure they understand the problems with short sales and will most certainly relay my own professional experiences with my own borrowers short sale transactions - the good (very few of those stories), the bad & the ugly, with the bad and ugly being the bulk of my stories. 

Professionally, I feel it is my duty and responsibility to make sure they understand all of their buying choices and most of their buyers agents, I believe, do the same.  While some of my borrowers will still decide to pursue short sales anyway, a lot of them choose not to.  Some will start out looking at short sales only to discover their own short sale horror story and afterwards decide to never look at another short sale again. 

Lastly, while I do understand those agents who choose not to pursue short sales because that particular type of business simply does not fit into their own business models, buyers are not obligated to use a Realtor/agent who won't work with short sales.  If a buyer wants to buy a short sale and their Realtor/agent says they won't show or submit offers on short sales, the buyer is free to work with another Realtor/agent. 

However, if the buyer chooses to continue working with the Realtor/agent who refuses to show short sales, the buyer has made their decision and at that point, it is no longer fair to say that the Realtor/agent is "steering" the buyer.  The buyer made an decision - PERIOD!!!

Dec 29, 2011 04:24 AM #2
Rainmaker
375,022
Gina Chirico
Lattimer Realty - Fairfield, NJ
Real Estate Agent - Essex County, New Jersey

Hi Dick and Donne, I absolutely agree that buyers should be informed about short sales and its their decision whether to pursue them or not.  Its frustrating when buyers tell you that short sales weren't an option because their agent didn't explain it to them but simply told them not to buy one or to stay away.  We may think - why didn't you find another agent but many of them being first time homebuyers took their agents advice without knowing why.  I don't handle it that way.  I educate the buyer and let them decide what's best for them and sometimes in the beginning even they don't know but in the end it was their decision and their choice of housing.  Thanks for reading and commenting.

Dec 29, 2011 02:31 PM #3
Rainmaker
571,818
Bill Gillhespy
16 Sunview Blvd - Fort Myers Beach, FL
Fort Myers Beach Realtor, Fort Myers Beach Agent - Homes & Condos

Hi Gina,  Interesting post.  Hopefully I'm not steering a client away from a short sale but I do try to educate them and see if the client is aware of the tough road ahead.

Jan 01, 2012 07:32 AM #4
Rainmaker
1,431,531
Gene Riemenschneider
Home Point Real Estate - Brentwood, CA
Turning Houses into Homes

Call it steering if you want.  I tell my buyers the issues with Short Sales and let them decide.  Most say skip them.  

Jan 01, 2012 10:06 AM #5
Rainmaker
886,783
J. Philip Faranda
J. Philip Faranda (J. Philip R.E. LLC) Westchester County NY - Briarcliff Manor, NY
Broker-Owner

Gina, I am here because of Bonne's suggestion and I am with you on this one- I list and sell quite a few short sales and while it may not be "illegal" steering, when an agent unduly scares a buyer about these deals, it is can be because they don't want to wait to get paid.

And the idea of referring the buyer is an under utilized one- how can you seriously represent the buyer when you don't understand the process.  

Jan 01, 2012 10:32 AM #6
Rainmaker
375,022
Gina Chirico
Lattimer Realty - Fairfield, NJ
Real Estate Agent - Essex County, New Jersey

Bill, educating is our job.  We provide them with all the information they need to decide what type of home purchase is for them.

Gene, the important point is that YOU ARE TELLING THEM ABOUT SHORT SALES.  The agents I'm referring to aren't even explaining the details of a short sale so that THE BUYER CAN SAY LETS SKIP THEM.  I've had my share of buyers who after being explained short sales, opted not to pursue them and that's fine.

J. Philip, I agree with you. 

Thanks for all the comments.  I appreciate you taking the time to read my post.  Happy New Year!

Jan 01, 2012 12:53 PM #7
Rainmaker
1,572,647
Lyn Sims
RE/MAX Suburban - Schaumburg, IL
Schaumburg IL Real Estate

Gina, it's a goose in the pic LOL. Anyway I have to agree, I let the buyer know what's up & what's involved truthfully. Most decide because of the extended wait time that it is not for them. I have never refused to show a home because of that. All those agents out there had better show 'all' homes available.

Jan 02, 2012 01:58 AM #8
Rainmaker
764,342
Jill Sackler
Charles Rutenberg Realty Inc. 516-575-7500 - Long Beach, NY
LI South Shore Real Estate - Broker Associate

I have never not shown someone a house they wanted to see (short sale or otherwise) but I can see how some agents with a couple of really bad experiences under their belts would discourage the buyer from this process. I agree with Donne who said if you explain it and the buyers decide not to pursue it, it's really not steering. They've made a decision on their own. But you were very clear in your explanation to Gene, so I understand your position, as well, and why you wrote this post.

Jan 04, 2012 12:28 PM #9
Rainmaker
710,650
Pacita Dimacali
Alain Pinel - Oakland, CA
Alameda/Contra Costa Counties CA

Gina

It's helpful to set expectations. I've run in to people who have absolutely the wrong idea of what a short sale is, and they pass that erroneous information along. So when I have buyers who are interested in a property, andI I know it's a short sale, I give them a link to my blogs about short sale to prepare them on what to expect. If they are in a hurry or have a deadline, it's smart to let them know that short sales could take 3-6 months. If they can wait, great. But if not, then short sales may not be right for them.

Thanks!

Jan 04, 2012 06:36 PM #10
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Rainmaker
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Gina Chirico

Real Estate Agent - Essex County, New Jersey
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