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Pamela Bicke…, Real Estate Pro in Indian Shores, FL

How are you dealing with short sale frustrations?

Asked by Pamela Bickett, Indian Shores, FL Sat Feb 28, 2009

It seems a lot of buyers want to pursue short sales, even after advised of the pitfalls. As a buyers agent, I am finding this incredibly frustrating, from agents listing SS as "approved at listed price- close fast!" and then my full price offer with loan pre-approval disappears into a black hole and the listing agent is avoiding responding. With SS being about half the inventory out there, it's difficult to avoid them, and I feel the process is way too involved. Today, after my third call to the listing agent about this offer in the past 3 days, I wish they would not even allow these properties to be listed until the lender has agreed to a price! Would keep a lot of us from spinning our wheels endlessly with no commission check, and no new home for qualified buyers!
Help- I'm getting discouraged and I cannot afford to get discouraged at this point! Thanks
As a Buyer's Agent for short sale, what would you recommend?

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Pamela - I have the same frustrations with a current client. Sometimes clients must self educate, but be very serious about your disclosures about the process they will go through. It's just plain ugly.

The client I am referring to is a couple, and he gets it and she doesn't.... but she's learning through the broken heart process of not getting a new home.

I need to say though that I think it is a listing agent problem. As a listing agent, I don't shy away from SS. I screen them, I have my sellers do a letter to the buyers before ratifying explaining what exactly the situation is, and how we will work. My clients and I both sign it. Then, we ask the buyer agent and buyers to sign it. THEN, we actually ratify the contract (contingent on approval) and submit for approval. Most banks won't pre-approve - I don't think any will. They need the offer. Sellers need buyers who will wait. Creating that trust at the onset of the relationship makes all the difference in the world... and the letter does that, I think.

As a buyers agent, it all depends on the market - many markets don't have much of any other inventory - it seems it's overwhelmingly short sales. If the listing says it is an approved short sale, I ask for a copy of the letter from the bank before I write. Many can't deliver that, but at least we know that there is no approval from the bank; many buyers move on at that point. I also have an addendum that the sellers must sign allowing their banks to talk directly to me so that the listing agent can not stop progress. It sounds good in theory, but I must be honest, my short sale closings are limited to being the listing agent. Most buyers get frustrated with the process and move on relatively quickly. It is possible that I am currently working with the first buyers who WILL decide they will go through the SS process to get the house they want. I will let you know if they ever get a house!
0 votes Thank Flag Link Sat Feb 28, 2009
Well your not going to like what I have to say but I stay as far away from short sales as I possibly can. I strongly educate my clients with true life stories. Just about every one of my clients that had a yearning to investigate the short sale market now hold the same feeling about them as I and want nothing to do with them.

If the agents taking them and the banks holding the mortgages find a way to streamline the process and make it more user friendly then I would be wiilling to take another look at them. If I was to write on one I would hope that it would be one that had a written approval and then I would do whatever I could do to verify that that was trully the case.

I understand and feel your pain. Maybe you need to use some different tactics when educating your clients.

Best to you.
1 vote Thank Flag Link Sat Feb 28, 2009
Bravo, Nick--good answer!

What I have starting doing with my buyers, Pamela, based on my experiences this year with short sales on both sides, is to be very up-front with them, and let them know that the process WILL take a minimum of five months. If the buyer's timeframe is too narrow for that, we only look at non-lender approval situations.

I should mention, however, that I've even been thwarted several times on foreclosure properties--three times now in the past six months I have had a buyer in contract on a bank-foreclosed property that the bank/seller either extended closing for an interminable time while they corrected title issues because the property was not foreclosed properly.

It seems to be something of a Catch-22, don't you think?
0 votes Thank Flag Link Fri Jul 10, 2009
Hi Pamela,

There are some great answers in this thread from some very professional people - well done everyone, it's great to see the high standard!
Unfortunately Pamela, not everyone adopts those high standards, and it would appear that you are encountering that currently. Stay determined, have heart; but also have a sense of when to cut your losses and move on. Any real estate market trend reveals a type of person we dont want to do business with, we just have to maintain our moral standards and high ethical values. :)
If the price has been approved by the bank, then they most likely counteroffered a previous offer and the buyer walked. Once this happens, the short sale negotiator removes the file from the system, and any further offers must go through the same rigmarole as the first - the listing agent just has all documentation that they need at hand, unless too much time has passed. This process does shorten the time frame for and approval, but it still can take a while.
We have a short sale system in place whereby the negotiations with the bank have been completed, and your buyer would be negotiating with a 3rd party, with the flexibility of a regular seller to buyer transaction. We try to make it easier for the retail buyer, but at the end of the day, we are salespeople trying to deal with salaried bank employees with stringent rules and regulations. Its always going to be frustrating.
Let me know if I can help you in any way.
Nick Fraser
Web Reference: http://www.nickfraser.com
0 votes Thank Flag Link Tue Mar 3, 2009
Vicky you sound like the dream short sale listing agent I would want to be in a transaction with. So nice to hear one talk about how they do their business and your not missing a beat. If they all could be like you we wouldn't have nearly the frustrations that we now have.

Let's hope that more will follow your suit.
0 votes Thank Flag Link Sat Feb 28, 2009
I would recommend for clients to keep moving if we dont receive a response. I place that as a disclaimer up front with foreclosure and short sale is drama. We may have to submit multi offers secure winning bid.

I am a seasoned real estate agent, working with short sales and foreclosures, I dont spin wheels, show properties work within clients lender approval not matter who is selling property. Clients are only approved approx. 60 days they need to hit street, secure a property they want to reside in lending could change again they are returned back to leasing a home

Investors are different they dont care.

Good luck

Dallas Realtor and Consultant, Mortgage Loan Officer, Lecturer regarding Credit Repair
– Lynn A. Crosby
Web Reference: http://www.lynn911.com
0 votes Thank Flag Link Sat Feb 28, 2009
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