I haven't sold 50 short sales. But I did close 4 last year, all of which were as the listing agent. I also failed to close 1. That one had multiple offers, which were fair offers that the bank should have approved. Unfortunately, for that homeowner, the loan had PMI, and as is the case with most (but not all) homes that have loans with PMI, the bank preferred to cash in on the insurance, rather than take a loss by accepting the offers I presented.
Of the 4 I sold, 3 of them had 2nd liens, and some of those 2nd liens were across 2 different banks. The 2nd liens were definitely a pain in the rear to deal with when they were with 2 banks, because there just isn't any money for that 2nd bank, but we need their approval. Negotiating that to success is a serious challenge.
In each case, the buyer's agent for every deal did the same thing: They called me approximately once a week and asked how it was going. I gave them a status every week with what I was currently waiting on so they could report back and keep their client informed. The longest deal had an escrow period that took 5 months. That's right, 5 months. It bounced around for 3 of those months at the bank, being handed off from over-worked negotiator to over-worked negotiator, apparently with the offer just sitting in a pile. Finally the clouds opened up and sunlight rained down and the deal seemed to get done "overnight".
In fact, in the latter part of 2008, all of the banks I dealt with improved their dealings substantially over the first part of the year. The 10x staffing increases they often needed to put in place were finally trained, and finally able to handle the insane volume of short sale offers they were considering.
Why the essay on short sales? Because up until recently, there's almost no way I would encourage, or probably even show one of my clients a home listed as a short sale. Notice I was never a buyer's agent, only a listing agent. The chances of closing the deal, before my client threw their hands up in frustration, were just too high.
Today, however, if I had a client considering a home that was a short sale, in an area devoid of foreclosures or other aggressively priced homes, I would show them a short sale. If the listing agent doesn't know what they are doing, I do, and I don't mind doing their work, if it means getting a deal done. I know a fictitious price when I see one. I know how the bank is going to appraise the property, and can get within a few dollars of their absolute bottom line pretty accurately.
If I had had 50 short sale listings last year, there's no way I would have had time to do anything else, without at least 5 agents working for me. Each deal required so much time and energy, with so many 2 hour phone calls that accomplished extremely little.
At any rate, the way I would help a short sale buyer is the same way I would help a short sale seller. I would only work deals I think have a very high chance of success. I hit 80% last year with short sales. That's not bad, statistically, and the failure stings all too much. I'm listing 3 more short sales right now (sadly...I really feel for my clients that need a short sale), and each of them are deals I believe we can succeed with. I wouldn't list a home as a short sale if I didn't think it could close. It's far too time consuming a process to end up not getting paid.
Whomever you choose to use, I think it's wise you seek out an agent with some short sale experience. I also think it's wise you consider short sale and foreclosure properties, along with non-distressed homes. By selecting the right agent, you won't have to to limit yourself to part of the market.
There are savvy Realtors out there who are good at what they do, including short sales.
The realtor you need to look for isn't one that necessarily has closed 50 short sales (a small percentage actually do close so 50 might be too high an expectation)
Any realtor closing 50 short sales even in a year probably doesn't have much time or need to post here on Trulia.
Here's a little education to help you better understand what you are getting in to.
Short Sales are most difficult because of 4 things and I'll describe those below.
First, The "listing" agent has no clue how to negotiate with the bank (remember, "your" realtor presents the offer, the listing agent negotiates that offer on your behalf to the bank) I just had a deal fall through because of the listing agents inability to properly negotiate.
Second, there is a 2nd lien holder (2nd loan borrowed and secured against the homes equity that "used" to be there) and that lienholder holds the 1st lien holder hostage forcing the home to go to foreclosure (I've seen banks do this to each other in spite harming the seller).
Third, the home is listed falsely low drawing in multiple offers creating two things, a lottery of sorts and lessening your "odds" of your offer being accepted. This can happen with bank owned homes as well.
Fourth and lastly, the buyer (that's you) was not informed about the long time periods that are required to wait for a reply (30-60 days on average) and they decide to walk away fro the process because they loose their patience or something else shows up for sale that they want more than the short sale home they wrote an offer on.
As long as you understand that Short Sales are a waiting game and also understand that you offer is out there in limbo in which your Realtor has no control over or information or updates to tell you about, then you're good to go.
And remember, You can write an offer on any property you choose and by AZ law the Realtor you employ is required to "present all offers". If one will not write an offer for you, find another Realtor.
One last rule that applies to all transactions, "Always Get Everything Agreed To In Writing".
If you need more help let me know.
Signature Realty Group
ABR, GRI, CNE, AHWD, MRE
2008-2009 Master of Real Estate award
The best advice I could give you as a first time home buyer is do NOT get tangled up in a short sale contract. I have my reasons, which are many, but for this forum, I'll just say that there is a plentiful selection of homes out there without going down the road to hell... oops... I meant short sales. And yes, I'm experienced with both the buying side and selling side of them. So as I said in my comment to you on your other question, just get in touch with me and we'll move forward with your home search.
When do decide to work with an agent, make sure that the LISTING AGENT is competent in short sales. The Buyer's agent has little to do with the process unless the Seller and LISTING AGENT both agree to allow them to handle negotiations, view docs, etc. The LISTING AGENT needs to get all of the docs ahead of time and present them to the lender with your signed contract. I recently obtained a CDPE (Certified Distressed Property Expert) designation for representing Sellers in short sales.
Again, the LISTING AGENT handles most, if not all of the work involved with a short sale. That's how it works.
You have definitely done your homework knowing that buyer expectations are one of the biggest hurdles when completing a short sale. I'd be more than happy to answer any questions for you as long as you aren't currently represented. I have done more than 50 and would be happy to entertain any questions you have.
There is an agent in my office that works with them all the time. She knows all the ins and outs of it! There are a small number that are impossible to close, however with the right research you will know that up front prior to entering in a contract.
Let me know if you havnt found any one and I will get you in touch!
The best advice I can give you regarding short sales is to stay away from them. The price has not been approved by the bank, a response from the bank can take up to 6 months, at the end there can be 20 or more bids on the same property, and close to 90% of them never close - for obvious reasons.
Some short sales can still close given the meet certain criteria (# of lienholders, specific bank holding the note, seller willing to work with the bank, etc), but those are rare and almost impossible to filter out as a buyer.
The best thing you can do is to look within the "priced approved" inventory with regular sellers and most foreclosures - although be aware of the games with some banks when it comes to multiple counter offers!
ABR - Accredited Buyer Representative
First and foremost, what is your situation? If you have a definitive timeline to move then I would say Short Sales are not for you. On the flip side if you have flexibility some short sales might work for you.
I would recommend that you pick a Realtor (buyerâ€™s agent) that you like and work together. A good buyers agent will have the knowledge to provide you with guidance and direction to fulfill your dream of homeownership.
Purchasing a home is a process with many elements, you have touched on a couple with your great questions. I live in Gilbert, love it and happen to be a buyerâ€™s agent.
The first step is to pick a Buyerâ€™s agent with the experience and knowledge to serve your needs.
Why are you only looking at a short sale? There are 50,000 homes in the Phoenix metro area to chose from. Short sales are not for the feint of heart, and are not the deal that many* seem to think they are.
I applaud you for coming to a place like this and asking questions. That shows you're smart, and you're aware, and you're wanting to learn -- all great qualities for a first-time buyer (well, ANY buyer).
I suggest you interview several agents before selecting one to represent you. As you've suggested, experience is important. But that's not the only thing to look for. You'll be working very closely with this person and you must find someone that is not only knowledgeable, but someone you like, trust and "click" with.
Even if you find the most experienced agent on the planet, if you find the guy/gal annoying for whatever reason, you won't have a good home buying experience.
There are a LOT of agents in the Phoenix area. From the brilliant to the worthless. Interview 4 or 5 and I'll bet you that there will be one where you almost immediately say, "This is the one". Ask questions, listen, read their website/blog and trust your instinct. You'll know.