Home Buying in 33701>Question Details

Otimec, Home Buyer in Saint Petersburg, FL

Why does it seem there is something funny going on with the listing agents when I try to buy foreclosures and short sales in FL?

Asked by Otimec, Saint Petersburg, FL Tue Nov 1, 2011

I have been trying to buy Foreclosures and short sales in FL I have the hunch there is some funny business going on. Half the time the house is under contract immediately upon it being listed. Many times listings have no pictures (how can you sell a house like that?), the listing agents rarely ever call you back. I sure wish there was a way to submit offers directly to the banks so the listing agents don't have the opportunity tell their friend what they need to top other offers. All the sudden there are many bidders on a house that has been sitting empty and has been for sale for months. They say they need your first and best offer. Why is it that these always go to the listing agents buyers? what is going on here? These practices are hurting good honest agents. Why doesn't someone do something about it?

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Alan Engman’s answer
Let’ s make something very clear…the deals are happening, not because they are being done unethically, but rather, because agents are listing properties at prices that the banks and investors feel are appropriate.

Something you may not be aware of; banks determine what a property’s value is prior to accepting an agent’s offer; they do their own internal appraisal prior to accepting any offer, regardless of who is making it, in basic economics, it’s referred to as “checks and balances”.

A listing agent sets the bar in terms of price, and the market lets them know if it’s set correctly. It is what is referred to as “making a market”, and is fundamental in any open market society. Agents and banks do not arbitrarily set prices and except/reject offers, the market and its current participants do, thereby creating transactions.

Agents and buyers that have issues with short sales are usually the ones that either, don’t understand the short sale process, and or, are unwilling to work within the perimeters that have been set by the banks.

A personal observation; qualified buyers are not being kept out of the market, but rather unqualified buyers and their agents are, and or, buyers offering financing are losing out to those offering cash.

If you want things to change, you’ll need to have the government create a mandate whereas the banks are required to complete a, predetermined percentage of their business based upon transactions where finance contingencies were present.
1 vote Thank Flag Link Fri Feb 17, 2012
BEST ANSWER
I agree that sometimes it appears that there are some funny goings on when it comes to short sales and REOs. I personally have run into some strange behavior by listing agents. However the only way to do something about these agents is to make a formal complaint and there is not always enough proof of unethical behavior. And, the buyer or seller just wants to move on with their life so they don't want to get involved with the process. Therefore it is hard to do anything about the problem.
0 votes Thank Flag Link Fri Nov 11, 2011
Just because there are a few bad Realtors does not mean that ALL are bad/manipulative/unethical/evil......that is a very offensive blanket statement. Saying something like this is also saying that every doctor/mechanic/dog groomer/teacher is bad because a few are not professional.

We do understand your frustrations and those of that really ARE professionals are just as disgruntled. No one here is saying that we condone that type of behavior although it does unfortunately happen. If you feel that something is unethical or illegal (if you aren't sure on Realtor ethics, the COE is available here: http://www.realtor.org/mempolweb.nsf/pages/2011code) then file a complaint with a) that person's broker, b) the association of Realtors they belong to, c) DBPR & FREC and d) the Attorney General's office.

At some point it will change but not if this is the only venue that you choose to "do something".
1 vote Thank Flag Link Thu Feb 16, 2012
Very frustrating as a buyer. Imagine how it feels for an agent who is experiencing the same for several of it's clients, even more frustrating. That's why we always sugest that a buyer should find a reliable Buyer's agent who will work for them. Listing agents are to busy finding listings and have little time to get to know each buyers specific needs.

Yes foreclosures are listed at Market Value, and most that happen to be in good shape get contracts in 7 days or less, usually multiple contracts and end up selling above asking price. Even then the buyer ends up with an excellent deal and a great property. I found most buyers need to be educated about how to offer on a foreclosure. They seem to have the incorrect idea that the bank is suffering and restless to sell any property therefore willing to take a big loss, not true. Bank will slowly reduce price until demand sets in. Making a significant lower offer is a waist of time for both buyer and agent.

Short-sales, stay away from them unless you are an investor who could care less if the deal goes thru or not. The only people who will tell you they are good deals are agent who list them, and want to double end the transaction if it ever gets to a closing.

Hopefully this reality check did not scare you away, but prepaired you for a winning fight.

Tony Vega
Charles Rutenberg Realty
1 vote Thank Flag Link Tue Nov 1, 2011
What I am seeing a lot is that banks are intentionally underpricing Foreclosure listings in order to generate multiple offers and then they come back and say give us your highest and best offer which usually ends up being over the asking price. As for short sales - the good ones do go under contract quickly. This is why its to your advantage to work with an agent who does a lot of short sales so you'll be the first to know when they hit the market. The market right now is not as bad as the media would have it seem. I have several buyers who hem and haw about a property and wait too long and then - guess what - its under contract. This is especially the case in the under $400K range in St. Petersburg. As for the ethics of it - a Realtor's ethic code is that they have to make all listings available to the public - we cannot just offer them to our best buyers. It's in the Seller's best interest to make them available to everyone, but as I said, the good ones go fast so you have to jump on them. As for agents not calling back/answering their phone - there's no excuse for that except maybe they aren't full-time Realtors. Feel free to call me if you need some help finding a home (and yes, I'm full-time). :)

Liane Jamason, REALTOR
Keller Williams Realty
727-755-3325

P.S. The link below will show you all of the available St. Pete foreclosures on the market.
1 vote Thank Flag Link Tue Nov 1, 2011
Foreclosures and short sales are very different animals. Short Sale homes are still owned by the owner, a foreclosure is owned by the bank. In both cases the bank must agree to the sale. In a short sale, you need to be at "fair market value". We run a regular CMA. In a foreclosure, the bank tells us what to list it for, and they dictate the terms of the sale. The offer is presented directly to them under the conditions they have set, and yes, there are often multiple offers. We often feel that they set the asking price low to get "multiple offers" or create a bidding situation. A short sale is not the same, the owner is still on the deed and they are trying to AVOID foreclosure. The homeowner must qualify for the short sale, and the offer to the bank has to meet their terms. The "Unknown" is this, what leans are on the property? What does the bank have to have in order to agree to a sale. So, in short, (no pun intended). Real Estate agents are not in charge. The bank is. I can assure you, we want to make the sale!~ Botton line? Many agents are just tired of dealing with distressed properties, other agents have become experts at it and are very good.
0 votes Thank Flag Link Thu Jun 26, 2014
Welcome to the world of distressed properties. There are many agents who will not work with short sales or foreclosures, there are others who make it their specialty, and some who will "sell" anything out there. I highly recommend that you work with an agent who is highly skilled in short sale/foreclosure. Ask, first...Are you SFR or CDPE Certified? Those designations are held by agents who have spent the time to study and pass a test at the end of the course. They will have a high level or proficiency that will help you reach your goals real estate goals.

Best of luck to you.
0 votes Thank Flag Link Sun May 18, 2014
As a general rule when I am acting as a listing agent in a short sale situation my obligation is to my client the Seller not the investor who would like to buy/steal the house. As a professional one should be courteous enough to return your calls, but they are not obligated to help you secure deals. Most of my Sellers want a credible offer that is likely to get accepted by their bank and they would like the offer to be from someone who has the funds and intent to close when approved. I have found with out of State investors in particular that many make numerous low ball offers on as many houses as possible knowing most will get declined and then after some are accepted they will pick and choose which deals they really want to see through and close on. Often they say they intend to close and then look for a way to assign or flip when it's time to close and if they do not find a willing participant they walk away from the contract. For the investor it's just savvy business but for the Seller who ends up in foreclosure they are devastated and often blame the agent. While this may not be indicative of your business practices it probably contributes to the reception you are getting from listing agents.
0 votes Thank Flag Link Sat May 18, 2013
When folks do not understand a process there is always suspicion of foul play.
Foreclosures and short sale ARE NOT TRANSPARENT processes. There is much that occurs behind those 900 Billion dollar curtains we will never see. To suggest, and for other agents to concur that the fault lies with unethical agents is to be as uninformed as the questioner.

Alan Engman reveals this is a highly competitive segment in a very competitive market involving highly complex transactions. Alan states and I agree, if you want to play with the big boys you need to put on your big boy britches and play big. You need a strong team. You need to stop crying when you lose. And there will be deals you want and will lose. It a business, not a hobby. No one wants to have their time wasted. it's a BIG Business. There are BIG players, involved with very deep pockets. If you are decisive, able and can compete, give Alan a call and get in the game.

It is human nature to want to find another to blame for their loses. So, this is no different. The business is to get new owners for this real estate as efficiently as possible. Most agents have buyer who ARE committed. If you choose to remain non-committed, you must understand, you are on the outside looking in. You will win but only should an accident occur. Many real estate professions do practice accidental real estate. These, however, may not be the ones who can guide you to a predictable outcome. When you are ready to commit...call a pro.
0 votes Thank Flag Link Fri Mar 15, 2013
great pitch, I am ready to call Alan....NOT
Flag Fri Mar 15, 2013
Wow, this has happened to me 4 times. House was on MLS at 9am and a contract on it by noon.
Give me a break not only are all these realtors shady I cannot find one that wants to help me find a house.
I am thinking about trying to get licensed just so I can find a house.
0 votes Thank Flag Link Fri Mar 15, 2013
I don't know how to amend to the question so I am posting here: I am a cash buyer. I have bought some homes for cash. I know the games realtor are playing. You want both sides of the deal so you make sure YOUR buyer gets your deal. That is not the way a market should work. You are not letting the system work. Many realtors even wait until other buyers are interested and then tell their buyer what he needs to bid or just does not report offers you don't want the seller to know about. You guys say, "That is illegal, that is not done". What a joke. It is sad realtors are not held liable for much of anything. You control the system so you can manipulate it. I can't believe there have not been nationwide scandal about this. How are sellers are not wise to this BS. If i was a bank I would put sales on open auctions where I see bids directly to keep realtors from manipulating the system. Why don't realtors speak up about this. The system will change one day and all the realtor will be singing the blues worse then they did when they stopped making tons of money without really doing anything. Don't you know the when something is too good to be true it will not last...
0 votes Thank Flag Link Thu Feb 16, 2012
Some help for you ……
Many of the short sales, if priced appropriately, are almost immediately placed under contract by prequalified buyers and their agents, and many/most of the buyers are also clients of the listing agent.

Why /how you ask; because agents such as me specialize in these types of transactions and are sought out by investors and buyers that have the cash or prequalification’s to buy/close the deals. Banks will not even allow an offer to be made without it being in order first. Buyers with proof of funds, offering cash, with few contingencies, go to the head of the line, and are buying 80% of the deals.

Good agents will be able to price a property within the range of what the bank wants, and upon doing so, have a qualified buyer ready to purchase it.
0 votes Thank Flag Link Wed Feb 15, 2012
There are many valid reasons why buyers prefer to work with RE agents related to RE transactions. Majority of banks prefer to work with experienced agents who understand the language and processes of these deals. I can't imagine going to a bank, blindly presenting an offer to a representative of the bank without understanding the position of all involved parties.

There is no "funny business" to be had here. The practices are not hurting buyers or sellers but protecting each party along the way of these type transactions. Going it alone without understanding how it all works is a situation setup for failure. I would suggest getting on board and understand the processes or hire a good and experienced RE professional to get the job done in the shortest amount of time possible. It appears you are losing opportunity at a rapid pace. Good luck to you!
0 votes Thank Flag Link Wed Nov 2, 2011
Good Morning,

I would not say it is funny business as much as it is a market that has 1/2 the inventory it did a year ago. It does matter if the home is a short sale, Foreclosure or resale if it is priced right it goes fast. I have clients that I have setup searches for in a particular area or condo building in some case and in fact last week I received a notice on my phone of a new listing (bank owned) in a particular building in DT St. Petersburg. I called my client and they already knew the building and said to put in an offer. That all happened in a matter of houses and we are closing soon. The same applies with short sales just to start the (LONG) process. If you find an agent that understands what you want it helps for sure. I feel your frustraction with some agents even being an agent. I call to show a property and get a message that they will call me back in 48 hours and don't even do that much.


Doug Bevis
Coldwell Banker
Top Producer
2011 Million Dollar Club
813-310-4454 (cell)
Doug.Bevis@FloridaMoves.com
http://www.FloridaMoves.com/Douglas.Bevis
0 votes Thank Flag Link Wed Nov 2, 2011
Otimec,
If you were to ask ANY real estate professional what is the VERY FIRST THING TO DO WHEN BUYING HOME..the response will be...select a real estate professional to represent you.

There is a reason for that. Now, having defied the most basic of instructions, you want to blame others for your actions. Something funny going on! There's a schemer behind every listing. No such thing in reality. You simply don't know how to do it and the rules that apply.

Get a agent and you will get results. Foreclosures are a very competitive environment. You need to be decisive and aggressive. If you are neither of these...then don't burden an agent until you are truly ready to buy.
0 votes Thank Flag Link Wed Nov 2, 2011
Welcome to the world of Short Sales and Bank Foreclosures! As an agent who lists 20 to 30 Short Sales per year and 20 to 30 Foreclosures. Some are easier than others. All are time consuming and dealing with the banks is truly an experience, good and bad. We always recommend a Seller and / or Buyer engaged Legal counsel. Many agents are to blame but some aren't. We are dealing with bank negotiators who were once a receptionist and now negotiating million dollar settlements and deals. With the lack of good inventory, foreclosures and good Short Sales don't last long. The agent you’re using is a main ingredient. They have to know who the other agent is and how they operate. There is a great respect among the better agents, but there are many Foreclosure agents that play games, never call back and don't even have a physical address. Dealing with the major franchise Realty companies, usually offer good service and assistance. Keep trying. Select a good agent with experience and they will will recommend a good real estate attorney you can work with.
Jim Soda … TheSodaGroup.com
Keller Williams Realty Sarasota-Lakewood Ranch
941-809-7759 Jim@jimsoda.com
Web Reference: http://www.jimsoda.com
0 votes Thank Flag Link Tue Nov 1, 2011
There are agents that wait for an offer to come in and have their buyer go just above the offer. This does create a problem. If you deal with a reputable agent from a large firm that understand the nature of a short sale/forclosure you should be OK. The short sale/forclousre process is filled with mindfields that may create a problem before the contract is fufilled. If you find an agent that has been doing these for at least 2 to 3 years there is a chance that the process will move smoothly. There is a program set up by B of A that is call equator that does smooth out the process. In this market you must be very carefull. Good Luck.
0 votes Thank Flag Link Tue Nov 1, 2011
Hi Otimec,

GREAT QUESTION!!! and you deserve a straight forward answer from an agent that works with buyers and sellers in short sales and only buyers in foreclosures. I have sold over 800 properties in 14 years so I know a bit about whats going on.

Short sales are a joke. It takes the banks approval to sell one. It takes 6 months to a year to MAYBE get bone done. My buyers usually move on to something else after getting tired of waiting. The bank is NEVER happy with the price, does want to pay a fair commission and asks for updated paperwork every three moths because its now outdated which pisses everybody off.

I currently have a short sale approved by BOA with an approval letter sitting on the desk of the negotiator. She asked to see the deed. We have sent it 6 times in the last 2 weeks and neither she, nor her supervisor will even admit they have it yet.

Now I ask you, you want a deal, how would you like our job? We spend more time with pictures and alike when its a regular sale with regular parties involved. Its a waste of time we have to deal with and the buyer is the beneficiary as the bank has already been made while so they don't have to do anything but play around.

Now you know why you get such a feeling, its not you or me, its the bank.

Kevin Cloutier
Commercial and Residential Realtor
Cape Coral, FL
0 votes Thank Flag Link Tue Nov 1, 2011
I don't think it's as 'funny' as it seems--foreclosures are in high demand becasue of the value, and most foreclosure listing agents have pretty solid lists of potential buyers long before bank-owned properties even go on the market. I've successfully represented several buyers on bank-owned purchases, and have had equally as many offers rejected as accepted.

Your best bet is to find a good foreclosure buyers agent in the area you are seeking to buy, and do not be surprised if they do charge an upfront fee for representation--the foreclosure market is very tricky, often time-consuming, and it does pay to have someone on your side who really knows what they are doing!
0 votes Thank Flag Link Tue Nov 1, 2011
correct
Flag Sun May 13, 2012
I don't think it's a matter of always going to the list agent's buyer. Most everyone will agree that it makes far more sense to find an agent you feel comfortable working with exclusively. Not only will you get straight facts but they'll work harder for you knowing you will be loyal.
Web Reference: http://www.mysharphomes.com
0 votes Thank Flag Link Tue Nov 1, 2011
We have the same problem here in my neck of the woods on foreclosures, not true for short sales. I don't know the answer other than I shy away from foreclosures untess my buyer has all cash or a significant down payments. The home will be sold to to investors and associates of the listing agents over 90% of the time in my unscientific research.
0 votes Thank Flag Link Tue Nov 1, 2011
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