Should agents represent themselves in the Short Sale of their own home?

Real Estate Broker/Owner with Vision Real Estate

A week or so ago I received a couple of great questions from one of our readers.  That led to further reader questions and interest on our experience and advice in representing yourself in the Short Sale of your own home.  I have included the readers original comment below... because I type so slow.  

"I have been reading all your info on short sales and I find it very helpful.  I have never sold a short sale because I have been told by several seasoned agents and brokers to stay away from them if you can.  But I am faced with selling my own house as a short sale.  Have you had any experience with banks not being so cooperative with agent owned short sale properties?  If you have, what has been the out come?"

So first I will begin by telling you that you're receiving the right advice when you say "I have been told by several seasoned agents and brokers to stay away from them if you can."  In today's tough market many agents are faced with doing everything, and anything to survive, but unfortunately that is the beginning of their own failure.  To survive this market you must focus on one area and become an  expert in that area, "Do one thing and Do it well".  The short sale niche' is tough and requires much experience to be proficient, you will get paid more often by simply referring the work to a local expert.

You are not alone many agents have been forced to short sale their homes and even faced foreclosure.  Even more sad is more agents have needlessly lost their homes to foreclosure out of pure embarrassment from their own hardship or attempted to Short Sale their own home and failed due to lack of experience. 

And here is why... the job of the bank is to "Hardball" every seller.  To the bank you are nothing more than a seller.  Think about it for a minute, why do people use attorneys?  Like real estate professionals they are a necessary evil.  Read on before you send me a nasty gram telling me how all your clients just love you and really love paying you thousands to sell their home.  Folks, people hire us and attorneys because we're supposed to be expert negotiators.  A bank loss mitigator is an expert negotiator.

"Sales people work in department stores and on car lots, expert negotiators make a great living in real estate."

The other reasons you do not want to represent yourself are as follows in this order!

  1. You are probably not a Short Sale Expert. 
  2. A seller cannot receive any proceeds from the sale, banks can and have prosecuted the creative sellers.
  3. Like any other time you represent yourself, you are putting yourself and your Broker at great risk.

So in my opinion you should hire a Short Sale Expert anytime you are dealing with a potential Short Sale... especially your own home.  I hope this has been of some assistance to you and the other readers who expressed interest in hearing our advice.   

Comments (66)

Bob & Carolin Benjamin
Benjamin Realty LLC - Gold Canyon, AZ
East Phoenix Arizona Homes

Does not seem smart for a home owner agent to handle their own short sale-- they are emotionally involved and it won't save them any money anyway -- -- in fact if they are believing the bank will pay them a commission, not likely .... best of luck.

May 07, 2009 03:09 PM
Harrison Painter
GoGladiator Media - Carmel, IN
New Media Consultant

One of the strongest rules I follow in Real Estate is to keep emotions in check.

When emotions run high, bad things usually happen. Since it would be near impossible to not be emotional on your own short sale, I feel it would serve an agent best to hire another agent to take over the process. Your time would be better served trying to secure profitable business, not losing sleep over the personal issue.

For those of you in this position, my thoughts and prayers are with you. Just know that you have the ability, and there is no doubt in my mind you can make it through the storm!

- Harrison Painter

May 07, 2009 03:44 PM
Jaret Ghent
Vision Real Estate - Roseville, CA
Expert Real Estate Advice

WOW!!!  Sorry for the delayed response I have been in a Broker elective course all evening. 

Thanks everyone for your opinions, insights and comments!  I believe the consensus of the group would be it is not a good idea.  And many of you have provided reasons why it is not a good idea to represent yourself in a Short Sale.

I believe if you are going to lose your home you should first consider a deed in lieu, save the heartache, stress and possible embarrassment.  Here is why:

  1. You cannot collect ANY proceeds, including commissions or referral fees.
  2. The credit damage is typically as bad as a FORECLOSURE.  
  3. Most E & O Insurance Policies will not cover you or your Broker.

Turn over the keys and be done!  Life is to short.... pun intended!



May 07, 2009 04:55 PM
Alisa Stone Herring
Stone Real Estate Group, LLC - Panama City Beach, FL

Another way for life for us right now. Short sales are most of the properties in our mls right now for sale.

May 07, 2009 05:12 PM
S&B Real Estate Team
Capstone Washington Real Estate, LLC - Vancouver, WA

I recently sold a house I owned as a short sale and successfully negotiated on my own behalf with the bank. I decided to list and sell my own short sale mostly to gain the experience. I figured it was best to be my own guinea pig! The outcome was great! The buyer got the price they offered, I got the mortgage balance forgiven, and I gained invaluable education/ experience which I've been able to pass on to others. That being said, if I had another house to short sale I'd give it to a friend to list just so someone could make some money out of the deal! 

May 07, 2009 05:33 PM
Jaret Ghent
Vision Real Estate - Roseville, CA
Expert Real Estate Advice


That is the unfortunate fact in a lot of markets currently.  My advise to you would be to shift all of your marketing and focus to First Time Home Buyers... the next wave all agents should be already riding!


Congrats on the successful sale of your home, sorry to hear your first short sale experience was with your own home! 


May 07, 2009 05:59 PM
Margaret Mitchell
Coldwell Banker Yorke Realty - York, ME
Seacoast Maine & NH Real Estate

Great blog with very informative comments.  Can an agent receive a referral fee for listing their home with another agent, if it is a short sale?

May 08, 2009 12:51 AM
Karen Crowson
Coldwell Banker Residential Brokerage - Rancho Bernardo, CA
Your Agent for Change

While I think short sales are here to stay for quite some time, if it were my own property, I'd fine a well-experienced agent in my area to handle it on my behalf.  The situation is stressful enough already.  I will be sure to recommend this post to a realtor friend who is considering short-selling her own home.  Some very good advice here.

May 08, 2009 12:54 AM
Rob Jacobs
Short sale pathways - Rockwood, MI
Short Sale Specialist

Hi jaret. I have to disagree with your comment about deed in lieu. A short sale is not as bad as a foreclosure. FHA will let you get a loan after 2 years out of a short and its 5 years on foreclosures. with a short sale you are much more likely to get out of the debt as well. Deed in lieu is a simple foreclosure plan for the bank and they may not release the debt. If there is a 2nd lien that will defintely not be waived whereas with a short sale we can usually get that debt released too.

You can collect commission if the broker lists the agents house and pays a cut after closing. If the broker is the list agent, the agents house who is being sold does not have to be on the HUD. The list office ultimately controls who gets what after close of escrow so the agent who sold their house via short sale can get a referral fee up to 100% of the commission.

Turning the keys over seems easy but the easy way out is rarely the best way out. know the ramifications before handing your house over to the bank.

May 08, 2009 12:58 AM
Marian Pierre-Louis
Fieldstone Historic Research - Medway, MA
Metrowest Boston

Short sales are tricky.  Expert advice is a must.  Thanks for reinforcing this.

May 08, 2009 02:01 AM
Patty Da Silva, Davie, Southwest Ranches Cooper City, Plantation, Weston, REALTOR
BROKER of Green Realty Properties® - 954-667-7253 - Davie, FL
Top Listing Broker


Some great points here..... 

Just some things to keep in mind.

Disclosure is everything. If you are planning to list and negotiate the short sale yourself, (I highly advise against it, for all the reasons mentioned here plus some more), let the lenders know UP FRONT. They might agree to it or they might not, either way, you are not risking the outcome of your short sale, if/when they find out. Unless you run your own show, please run this by your broker, the liability your are exposing his/her to is great and you are likely not covered by E&O.

If you are giving the listing to someone experienced in handling short sales, write a letter to the lender letting them know you are a licensed Realtor and that you are not seeking any commission of referral fees.

A deed-in-lieu is not seen the same as a short sale and it does have different, (potentially more severe), consequences.  Not to mention that one also must qualify for a deed-in-lieu. It is not as simple as mailing your key back.

Patty Da Silva, CDPE©, RESS®, AHWD®, e-PRO®

CERTIFIED DISTRESSED PROPERTY EXPERT© and Real Estate Short Sale Specialist®

BROKER Associate REALTOR® & Licensed Mortgage Broker - Senior Financial Advisor

Visit for SouthEast Florida's best properties.


May 08, 2009 03:18 AM
Jaret Ghent
Vision Real Estate - Roseville, CA
Expert Real Estate Advice

Good Morning and Afternoon for some!


A seller cannot receive any compensation in a short sale transaction.  Referrals or Broker kick backs as "Short Sales Pathways" suggests.


I believe you are dead on... say hey to the Alain Pinel Group.  Which office are you with?

Rob aka "Short Sale Pathways",

You are wrong about several items in your comment, especially the one about receiving a kickback from your Broker!  Whooo... you need to research that a bit, will someone else explain this to Rob?

Your interpitation of the FHA rules are wrong as well, all the FHA lending guidelines have been recently changed, get with a good lender.

Do we have a lender in the house that can clear this up for Rob?


I couldn't have said it better!  Thanks for stopping by!

May 08, 2009 03:25 AM
Gene Riemenschneider
Home Point Real Estate - Brentwood, CA
Turning Houses into Homes

I cannot see the bank letting you make a commission off of it.  Get another agent.  Let them handle the headaches and make the money.

May 08, 2009 03:31 AM
Kent Dills
Broker, Dills Real Estate - Bellingham, WA
Real Estate 817-495-8028, Bellingham, Washington

Hire another agent who is a short sale expert to list and sell.  Cuts the emotional tie and ensures someone gets paid for doing a lot of work!

May 08, 2009 07:03 AM
Lyn Sims
Schaumburg, IL
Real Estate Broker Retired

What's that old addage about a fool that represents himself?  I think that as an agent you should hire an attorney that is familiar with short sale negotiations and take yourself out of the picture.  You cannot be impartial on your own house & set of circumstances.  The attorney can also do your closing docs also.  I find that works well in my area of IL.

May 08, 2009 07:07 AM
Aaron Hoffman
Florida Homes Realty & Mortgage - Jacksonville, FL

There are a number of reasons people use agents, but a heck of a lot less would use them if there was a better alternative.  The MLS is a monopoly and too many people feel they don't have a choice but to hire an agent.  As for being an expert negotiator?  I can't agree on either point you make.

Realtors aren't great negotiators.  Well, I should say the great majority of them are not.  They are liaisons between parties.  Ponder this...  A seller has a low-ball price in his mind as a worst case scenario of what he'll take and a buyer has a high end he wants is willing to pay, but really doesn't want to.  And all we have to do, as agents, is throw some numbers around until both parties agree.  If they don't, there isn't much you can do to sweeten the deal. 

As for Loss Mitigators being expert negotiators?  I just received a few resumes from people who where in that field.  They make an hourly rate at $12.50 an hour.  They are fresh out of college and green as can be.  They have no idea what it's like to lose a home, much less care.  They are way overworked with files.  Each file is a family struggling to keep stay together and just get back on their feet.  Every phone call that guy gets is from a desperate homeowner or an agent that has never worked on a short-sale in his life and is looking to experiment with this family to see if he wants to ever try a short-sale again.  A loss mitigator is hardly a way to make a living.  The lender just wants to make sure their calculations work in their favor. (using a computer program) They can either do it or they can't. If you can't hack it against a fresh college recruit, then how good are your negotiation skills?

The answer to the question about agents handling their own short-sale is that it depends.  In some instances people faced with desperate times will fight and claw to get what they want.  They want to be responcible for their own outcome.  This type of agent would probably best serve themselves because they will work harder than any agent ever could.  

Now if the agent is uncomfortable dealing with debt collectors, they better pass it along!  Loss mitigators are not the warmest people in the world, and they love to say no.

May 08, 2009 03:37 PM
Jaret Ghent
Vision Real Estate - Roseville, CA
Expert Real Estate Advice

Thanks all for the incredible input, comments and advise!

Hey Aaron,

Welcome ot activerain, it appears you just joined.  You bring up some good points, but I believe you are missing some as well.  How many short sale transactions have you closed?

I encourage everyone to read this recent Inman News article; "FAILED SHORT SALES TAKE HEAVY TOLL"

But first read my latest post...




May 10, 2009 03:45 AM
Satar Naghshineh
Satar - Amiri Property and Financial Services Corp. - Irvine, CA

Actually Aaron is correct on all his points. If you tell me what points you disagree with, I will gladly debate them.

Aug 02, 2009 06:24 PM

Short sales can be nightmares.  That is the reason real estate agents avoid them  Their buyers become tied up until a decision is made by "third party" involved (the bank).  They can take months and months, only to be told NO by the bank.  The reason they are taking so long is the mumbo jumbo of bundles of mortgages sold cannot be cleanly traced..thus there is much red tape to wander through.

I've seen short sales take as long as two years to close.  Are you THAT patient?  And willing to risk ultimately losing everything?


Jan 25, 2011 11:44 AM
Mary kirsch

I bought my home as a Realtor it was a short sale.  I also did a BPO on the home prior. I offered less then what my bpo actually came in on. ( i disclosed to the servicer and bank and on my listing) I also was countered and acepted their counter. ) I was also paid 3% commission . all was with true disclosure and every party involved  was made aware of this.  I am currently a short sale negotiator for a different company and i deal with the lenders all day in negotiating.  its very simple for me. I dont believe short sales are hard at all and negotiating with the servicers and lenders.   we as realtor  need to be honest and adjust the price to the market value  not low ball it.  the appraisal is going to be done and the most recent comparables are going to be used.  if shrt sales are hard or never go thru  its onlt due to lack of experience of the agent and communication.  in my opinion.  

Jan 29, 2012 05:31 AM