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

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.

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

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

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! 

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?

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.

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.

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

Hi,

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 http://www.pattydasilva.com for SouthEast Florida's best properties.

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.

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!

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.

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.

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