Stop playing with Short sales - Lenders are stupid AGAIN!!!

By
Education & Training with Real Estate Expert Witness Support

I know we think we are helping people but agents are telling me that only 5-10% of short sales ever close.  Too often,  in an effort to save a house,  an agent will work 3-4 months trying to get a lender to respond to a short sale.  Then, if you could even get a response from a lender,  they come back with a ridicilous counter or asking that you cut your commission.  Who said banks were smart.  They claim that they will do anything to avoid foreclosure but if you are active in the market,  you know that this isn't true.  Sometimes,  banks are just stupid,  And,  you can't fix STUPID.  who else would make no down loans to people with marginal credit and let them fill out their own loan apps without verification.

Now the real estate industry is trying to bail them out by finding a buyer ......... and they still get it wrong. Something has to get their attention and my idea is to stop working short sales.  If you stop showing short sale homes,  things would change dramatically.  Or,  if buyers would say,  respond within x days or we are gone. And, if we really did that,  things would change. 

The same applies to REO sales.  When the lender counters back with AS Is,  jamming you on time frames, ignoring the market and countering price and other over the top counters,  if buyers walked,  it would stop.  Or, if we just quit showing them,  it would stop.

Who's first??

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Guy Berry

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Comments (13)

Patricia Murray
Premiere Plus Realty Co. - Naples, FL

I am starting to see this trend, buyers shying away from short sale showings. They waited once or twice, with nothing or very little coming back to them and decided it isn't worth "the deal."

Jul 22, 2008 05:35 PM
Guy Berry
Real Estate Expert Witness Support - San Jose, CA
Real Estate Broker and Legal Expert

I agree.  Something must be done. Agents are working their heart out and the lenders are going home at 5 pm.  It's not their money.  They are clerks.  If the banks hired a team of real estate agents to take over their REO and short sale departments,  they would be shocked what we could do.

Jul 22, 2008 05:39 PM
Paula Swayne
Dunnigan, Realtors, Sacramento (916) 425-9715 - Sacramento, CA
Realtor-Land Park, East Sac & Curtis Park -Dunniga

Hi Guy!
I agree with your frustration...I have a short sale listing.  However, the flaw in your boycott is that 1. I am convinced the banks want a foreclosure instead of a short sale and 2. the foreclosures around here are getting 5-15 offers, so if the first buyer walks, there is always another to take their place.  But I would truly like to know why it takes so long for a response.

Jul 22, 2008 05:40 PM
Bobby Stevens
Windermere Real Estate/Lane County - Eugene, OR
Realtor, Eugene, Oregon

I've been wondering about this. I haven't worked short sales yet, but most stories I hear are about frustration and loooong third party response times. It can take a long time to sell a house in this market unless it's priced well and the seller is responsive and flexible. From what I read the lender doesn't really have any incentive to sell for anything less than a premium price!

Jul 22, 2008 05:44 PM
Tim - Arizona Short Sale Agent
Arizona Short Sale Group - Scottsdale, AZ

Why would you want to stop with short sales.

Our Company has such a success in getting short sales approved, we have over 450 transactions closed as of 2008.

Yes, I do talk to Agents every day that do not have success and are starting to shy away from short sale listings and even REO Listings now.

This is where we come into play.  We have such a successful program with our contacts at the lenders and asset managers that our agents are doing more business by marketing to foreclosures.  With more and more people shying away from foreclosures it is leaving the door wide open for listings.

All it takes is working with a company that can get the work done for you.
So Agents (as i am myself) can focus on getting the listings and selling.

We do not need to sit and deal with the "stupid" banks as Guy put it.  Because yes, a lot just seem to have no clue.

I would suggest not leaving short sales, but partnering with a company that can do the dirty work and spend the time on the phones with the banks for you.

And the best part is there is NO FEES or COMMISSION Splits - So what do you have to lose, but Listings and Commission Money! 

Feel free to see my profile and ask me any questions.  We have a lot of agents I have helped to build a bigger business with short sales than they had in the real estate boom. 

REO's are another story... I have run into so many reo brokers that just do not answer phones or emails and take weeks, sometimes 3 months in the latest case to let me know if my clients offer was accepted.  Only to find out they took another offer 1 month ago. 

Jul 22, 2008 06:01 PM
Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Buy Daytona condos for heavenly good prices

I totally disagree regarding short sales. When I see 5% success rate, I know that this is when agents substitute the knowledge with a push tactics. THey are simply not able to handle it. They should not take it upon themselves, but this is not a crime to promise what you can't do, and the customer is the last one to understand that a confident fast talking agent does not know a diggly squat about short sales.

It is like working the riptides, If you are in a riptide and you are trying to swim to the shore, you would drown. You need to swim parallel the shore for 20 or more feet and then, when you are no longer in the riptide, you safely swim to the shore. The difference is that these agents do not drown (such a misfortune), but their customers do...

Jul 22, 2008 06:12 PM
Anthony Kirlew
Group 46:10 Network @ eXp Realty - Gilbert, AZ
Helping You Make Fiscally Sound Choices

I won't split hairs and argue whether it's 5, 10, or 15% of short saleas that get closed, but I do know first hand, that the lenders are still shooting themselves in the foot by not making deals.

It seems that the logical thing to do would have been re-negotiating with their buyers (on the secondary market) so that they could adjust their rates without defaulting the loans.

Jul 22, 2008 06:37 PM
Paula Swayne
Dunnigan, Realtors, Sacramento (916) 425-9715 - Sacramento, CA
Realtor-Land Park, East Sac & Curtis Park -Dunniga

Jon,
Knowing how to work a short sale is one thing...not having a response from a lender is nothing short of criminal (no pun intended).  I am a professional Realtor and I do not promise something I can't deliver...shame on you for making such a sweeping condemnation of all agents who work short sales!
Tim,
I know of companies who receive 3% of the agents commission to perform miraculously with short sales...and I am sure you are not the one that I have knowledge of...but the one I know of made a lot of promises of connections agents don't have, of speeding up the process, etc.  They fell sadly short and created more frustrations instead of less.

Jul 22, 2008 06:39 PM
Cameron Novak
The Homefinding Center - Corona, CA
Featured Corona Real Estate Agent Team

One item left out....

Short Sale listings are terrific lead generators if marketed properly.



Cameron Novak
The Homefinding Center
Corona, California

Chat with me about real estate

Jul 22, 2008 09:43 PM
Chip Jefferson
Gibbs Realty and Auction Company - Columbia, SC

I guess I am first. I do not work on or negotiate shorts sales. They are too time consuming and frustrating. Its ridiculous!

Jul 22, 2008 11:24 PM
James Downing - Metro DC Houses Team REALTORS®, CRS, GRI, ABR,MRP, MilRes
Real Living | At Home - Washington, DC
When Looking to Buy or Sell - Make the Right Move

I would rather drive renters around all day than deal with a short sale.  They are a waste of time.  REO's have their issues - but the bank actually responds within a day or two.

Banks need to get their act together - the system is broken.  Period.

Jul 23, 2008 12:20 AM
Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Buy Daytona condos for heavenly good prices

Paula,

If someone has 4-5% success rate, and others over 90%, who should be ashamed? Would it be fair to look from the client's angle, not agents'? I have nothing to be ashamed of, I am giving it to the attorney, who has over 90% success rate. He gets the answers from lenders.

Is the result still important? So, when I see 5% success rate, I would say it again that somebody is screwing their clients. Whether with the best intentions or not is irrelevant to the clients who lose.

Jul 23, 2008 05:55 PM
Mike Davis
Keller Williams Realty, Augusta Partners - Evans, GA
Realtor, Selling Buying Homes Fort Gordon, Hephzibah, Augusta, Evans

Hello Guy , I think you have a point, however if all information is completed in the short sales package the first time and submitted and followed up you might be able to help a family out. Remember short sales are for homeowners that have fallen upon hard times and have a sudden hardship........why not help and maybe make alittle commission at the same time

Mike

Oct 01, 2008 06:42 PM