Hello to all of my collegues in this great industry,
Have you been involved in a short sale yet? If not, you really need to dig deep for the facts and fiction of these transactions. If you have, then you understand how the process can be long, tedious and trying. The fact of the matter is this - with the state of our industry and market, nearly every Realtor will be involved in a short sale sooner or later.
Lets explore some of the key aspects of these transactions:
1. Why is the process as complicated as it is?
2. Why do lenders seem to be "at odds" in every step of the process?
3. Why do we as Realtors end up with the "short end of the stick" in nearly every transaction?
Answer to #1: The process involves getting an agreement between Seller of Home and Lender to Seller to allow the "short sale" to take place. Seller is upside down and owes more than either the home is worth or the current market-value of home. Seller cannot afford to make the payments any longer and takes action to get the home sold. The listing agent gets involved and sometimes a 3rd party negotiator is also involved (this is a new career that has developed due to the state of the industry). Lender is looking to get as much money back on the loan as possible (the rest is a write-off).
Answer to #2: The lenders in the industry are faced with an ever-increasing load of "short sale" requests. Their loss-mitigation departments are under staffed and cannot get to all the requests in a timely fashion. They all have procedures to deal with these requests that can take from 30-60+ days to get resolved. And they all want as much as possible from the transaction. They do not seem able to do anything in a timely manner and totally disregard the normal transaction times and contracts from any state.
Answer to #3: The Realtors in the process are just trying to make something happen for their clients. The listing agent must work diligently and carefully with a client that is strapped for cash, has very few options and somewhat desparate. The Buyer's Agent must do their research to ascertain the true value of the home and work on keeping the expectations under control of their clients in this lengthy process.
For both of these agents efforts, they end up with a process that takes much more time than the usual transaction, must deal with the aggravation of their clients on both sides and typically get less commission in the end.
It is in our best interest to stay with the process to successful completion, but something must be done about the untimeliness from lenders, lack of information and reduced commissions. For all of you Realtors out there, get to know this process asap. You'll be better off.
Good luck and all the very best!
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