Short Sales Are Neither Short Nor Sales
I hate short sales. I hate them as individuals, and I hate them as a group. Were short sales a people, genocide would be a virtue.
Maybe this is the wrong opinion for a Realtor® to have under these market conditions. Maybe some of the eighty-four subscribers to this blog are anxious short sale sellers on the verge of hiring Elite Properties, who will now think me a thoughtless slob. Maybe my family will be out on the street because I’m such a poor businessman, saying what I think about short sales out loud on the Internets and all.
It’s not that I don’t care about all that bad stuff happening. But I still hate short sales.
A Short Sale Tale
This is a true short sale story.
A buyer finds us through our web site, works with an agent of mine, and writes up an offer on a short sale home. The seller accepts the offer, but we don’t have short sale approval from the bank yet. This is back in November or so. The house is a great buy compared to everything else on the market.
For the next several months, my agent plays a phone game with the listing agent, a game familiar to any agent who’s ever worked a short sale.
Stripped of the pleasantries and extra details, the game goes like this:
Agent 1: “Has the bank accepted our offer yet?” Agent 2: “No.”
Agent 1: “Has the bank accepted our offer yet?” Agent 2: “No.”
Agent 1: “Has the bank accepted our offer yet?” Agent 2: “No.”
Agent 1: “Has the bank accepted our offer yet?” Agent 2: “No.”
This goes on for three or four months, until one day, miracle of miracles, Agent 2 says “Yes”, the bank has accepted our offer. Only now, guess what? The house isn’t a great buy any more because the bank waited so long. Yesterday’s bargain is today’s overpriced turkey, so now the buyer wants to cancel the transaction and go look at other houses! (Which the buyer is within her rights to do, by the way, since the bank has a “short sale contingency” period that expired months ago).
Circle The Winner, a Multiple Choice Question
The winner on the above scenario was:
A) The seller.
B) The seller’s real estate agent.
C) The buyer.
D) The buyer’s real estate agent.
E) The bank.
The Answer Revealed:
Did you guess “F) None of the above?”
Right you are!
March 30th, 2008 at 5:38 pm
I agree with you 100%. Too many agents don’t know how to do short sales, and too many lenders have “loss mitigation” people who feel that a full in-basket along with a over-filled voice mail system = job security!
I tried to show a short sale (reluctantly) today, and the seller, who seems to have no motivation to do the short sale, answered the door, told me it was inconvenient to show and then slammed the door in my face. (He had finally returned my call from Friday at 10:30 this morning and told me that a 1:00 pm showing would be “fine.”) This may be an isolated case of seller-in-denial, or seller is “bi-polar” but I probably won’t try to show it again. (On top of that, the listing agent has a non-working email, and doesn’t return calls either!)
I successfully sold several short sales back in the 90’s, but had many responses (6 months later) after my buyers had bought something else.
Short sales are not worth the trouble to show, let alone write an offer on!
March 31st, 2008 at 5:00 am
In comment to your references about short sales, many are true.
Many investors, including realtors are challenged with short sales. They are a lot of work and lenders are hard to deal with.
However we found an easier way. A company now offers a short sale processing engine now available online. This website assembles the entire short sale transaction and submits it electronically to the lender in the format that gets approved quickly.
The benefit to us is the way it shortens timeframes on every short sale approval from months to days. They told us it’s because the company is direct connected to most lenders servicing platforms. I can’t speak for everybody but, I like getting paid quicker and more often so it made sense to me.
You have to be a subscribing member to get access to the short sale engine, but for us it has proven to be worth 10 times the fee. Short sales are the only thing moving in my area. So it’s basically do short sales or starve.
It took us a week or so to get approved. The company told us they are limiting access to this service and are very near capacity so they do not advertise it. If you need help with your short sales and want to get paid more often, I suggest giving it a try. You may get in.. You may not.
Go to www.loanresolve.com. You will see the button for the short sale engine on the front of their website. They have recently removed the apply now button and just show an info page instead.
The only way you will get info, pricing or access is if you click on the “contact us” tab on their site and specically request information on the short sale engine. It may take a day or two to hear back from them, but it’s worth it if you can get in. It will save you mountains of time and B.S. Good luck and keep shorting.
March 31st, 2008 at 5:30 am
Good article. Everything “quick”, “fast”, “short” is usually problematic too. Me, as a member of West Toronto realtor team, prefer standart term sales, because we are dealing usually with family mansions and houses and I believe there’s no need to hurry in these segment (especially in Canada). On the other hand, if it’s something difficult, it’s also challenging!
March 31st, 2008 at 2:45 pm
Well, thanks everyone for the comments.
@Vicki, you need to get a special recognition for actually having an ad-free response.
@Jim, here short sales account for about six per cent of all sales, so one can easily not starve and not do them.
@West Toronto, I don’t know if I made it clear, but I was actually talking about “Short sales” as in the seller can’t pay off the note. Must be a USA thing.
I have noticed that I’ve been spending a lot of time lately bagging on things. That probably isn’t a good long term blogging strategy or anything. But I still hate short sales.