No, you don't. But remember: A short sale has all the complications of a regular purchase transaction. Plus, there's the extra contingency of bank approval, and all that entails.

So, in addition to negotiating with the seller (if you're the buyer...or negotiating with the buyer, if you're the seller), there is also a short sale package that has to be prepared: a hardship letter, past tax returns, current W-2s, and more. Then the process with the lender seldom goes smoothly. They don't return calls. They claims they never received material faxed to them. When you call back, you end up speaking to someone else who's never heard of you. You spend 30-60 minutes or more on hold on the phone. You never know if the bank will approve the sale. And even if you get a verbal commitment, you need the paperwork. And if there's a time crunch--if the seller is just a few weeks away from the auction--there's a lot of angst just wondering if the lender will make a decision, or let it go to auction.

For all of those reasons, a Realtor is very, very useful. But, technically, no, you don't need one.

Wed Feb 20 2008, 17:43

Hi John,

It has been my experience that most (if not all) banks will not work directly with a home buyer or investor. They prefer to have at least one agent (either representing the seller or the buyer) in the transaction to ensure that certain disclosures are made and proper protocol is adhered to. Because of the overwhelming number of case files each loss mitigator is handling these days, the short sale package must be complete when submitted along with the offer to stand a reasonable chance of being looked at and seriously considered.

I firmly believe that both home buyers and home sellers deserve representation. The banks usually will not have a problem paying brokerage fees, although they may attempt to negotiate a lower rate with the agent(s).

The best advice that I can offer you is to find a full-time Realtor in your area of interest who is familiar with the short sale process and commit to working exclusively with that agent. Not only will they be able to share vital information and apply their expert negotiating skills but they also know how to effectively interact with listing agents and/or the seller's lender.

Wed Feb 20 2008, 17:41