Short Sales…Aren’t
Everyone wants a deal! We want the best price and quality combination our shrinking dollars can afford us.
The same is true for folks entering the real estate market to purchase. If you haven’t noticed, many folks when they call for housing information, ask for information regarding foreclosures and these “short sales.” I’ll tell you right now, that of the folks that I closed that originally told me they wanted a foreclosure or short sale, only 1 in the last year actually purchased a distressed property.
You know the drill, prospect says, “I want to only look at foreclosures and short sales,” thinking that these are the cheapest properties out there, and, therefore, the best value. As a buyer’s agent, you likely know how the dance is going to go….
- Send prospect list of homes that meet their criteria, distressed properties and non;
- Immediate phone call from prospect, “Only want distressed properties!”
- While showing the prospect homes one beautiful Saturday, they ask why they haven’t gotten 123 Main St sent to them
- 123 Main St is a non-distressed property
- 123 Main St is priced appropriately, in great shape and already under contract
At this point, the prospect does one of two things:
- Begins to listen to you; or
- Decides to work with a different agent that “listens to me.”
Ok, so a bit of an over-simplification of the process, but you get the gist.
Need more reason to be wary of short-sales, specifically? Check out this article from USA Today:
Just 23% of short-sale offers that homeowners receive from potential buyers actually close, according to a February study of 1,300 real estate agents by Campbell Communications. More than 90% of agents cited a slow response from the lender as the reason short sales were lost.
23% is an extremely LOW execution rate! 77% fail…over 3 out of every 4 short sales fail to close. Yikes, those are low odds for closing…
That’s a Grim Picture of Short Sales, but…
There is a silver lining, thin, but it does exist.
If you are the listing agent of a short sale listing, you need to stop trying to negotiate with the banks on behalf of your clients. Your efforts are best utilized, on behalf of your clients, in marketing the property and negotiating the deals to be presented to the bank. For your sanity, and the sanity of your clients, you should enlist the help of a short sale specialist or a real estate attorney.
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John C says:
Tuesday, August 11, 2009 at 10:40am
I have to respectfully disagree with “admin” on this post, if by short sale specialist you mean a company that supposedly fast tracks the process by working with the bank. Of all the short sales I have been involved with, the one where a short sale company was involved was the least productive, least informed, and worst outcome. In this case, the seller signed up with a short sale negotiator that advertised and purported to have a great relationship with the big banks, and promised a fast response and help on negotiating. After 90 days of waiting, our offer was rejected, no counter offer, no nothing. Thanks a lot, short sale specialist.
Todd Waller says:
Tuesday, August 11, 2009 at 10:53am
John,
Thanks for your comment. As a listing agent, I’ve found the help of our short sale specialists to be excellent. Regardless of the involvement of a short sale negotiator, banks still appear to take their sweet time in negotiating, or even responding, to any offers submitted.
Now, as a buyer’s agent, the two things I advise my clients are:
1 – Patience
2 – More Patience
Just because we submit a great offer on a short sale, does not mean that the bank will take our offer.
We’re advocating that as a listing agent, don’t put yourself between the bank and the seller. As buyer’s agents, we need to counsel patience for our clients and manage their expectations in this rapidly changing marketplace.