As a first time home buyer, I have been working with a realtor who I feel is not looking out for my best interest. I need some expert advise.

Asked by wkim107228, 30044 Fri Oct 5, 2012

Currently am under contract on a short sale town house and has 2 delayed closing date. Now I have my mortgage lender asking for additional amount to keep my interest locked in. I have found out at the previous closing date which got extended that the seller is filing Chapter 7 bankrupcy and will have to move our closing date yet again after their court date. I'm finding all of this information just now instead of before we were under contract.
And all my realtor can say is that she wasn't aware of the information, that we are buying a bargain home so there are no negotiating aspect to ask the seller's/bank to pay for the interest on the lock in interest rate, that she/her brokerage firm/mortgage lender are all doing me a favor since the home that I'm purchasing is not substantial in dollar amount. She actually told me to my face that she is not going to make enough money from this sale.
I am so frustrated at this point.....don't know where to go from here. Please help!

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Bruce Ailion, Agent, Marietta, GA
Fri Oct 5, 2012
BEST ANSWER
The first mistake your agent made was making any representation that a short sale would close, could close or when. If you needed to move, a short sale should never have been on the table as an option.

The second mistake was paying for an interest rate lock in a declining interest rate environment. Rates today are lower than what every your lock was, kiss that money goodbye, find a property you can buy and get today's lowest rate.

Few agents will tell you the truth, which is we have bills to pay, we work for professional fees, time is money, and low priced short sales at a 2, 2.5 or 3% generally do not pay the cost of the services provided. Occasionally we lose money representing someone, occasionally we work for charity but in the end we work to pay our bills just like you. You would not work on weekends for the same pay you worked during the week at some point we have to say, hey I'm not being paid for this extra work. A tip of the hat to an agent willing to tell you like it is.

It's not easy buying a short sale. The fact that you are frustrated with the whole process is to be expected. Your choice is simple, hang in there and stop complaining. Ditch this transaction, maybe ditch this agent and find a property that can close and rejoice that you are able to buy ad a fraction of 5 years ago price an interest rate lower than anyone living above ground has ever seen. As bad is it is you could be that short seller, bankrupt, soon without a home, and unable to get these giveaway prices and loans


Bruce Ailion,
RE/MAX Greater Atlanta
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2 votes
Rodney Mason, Mortgage Broker Or Lender, Atlanta, GA
Sat Oct 6, 2012
Purchasing a home via short sale is not at all an easy process. A lot will depend on how experienced the Listing Agent is.

Short sales have so many ways in which they can go wrong. Many short sales simply never close after several weeks or months of work. This is a fact that every buyer needs to completely understand.

A lot of the reasons for the fallout depend on the seller. To qualify for a short sale, the seller must submit all of their financial documentation AND prove that that currently have a financial hardship. Many sellers don’t submit the proper paperwork resulting in delays. Some sellers cannot demonstrate the required financial hardship. If a seller files Bankruptcy during the process, that will cause a delay. There are countless things that can and often will go wrong. Some can be overcome, some cannot. No Listing Agent, no matter how good they are, can control every action of a seller.

A short sale is VERY time consuming for all parties involved. A Buyer’s Agent has absolutely no control in the short sale process. They are solely dependent on the Listing Agent and the seller.

If your sales price is very low, then your real estate agent is correct. They will probably make very little money for all of the time they have invested on your behalf. Some don't even make minimum wage when it's all finished. When the transaction falls apart, they make zero. Understanding these types of sacrifices is very important before you say someone is not looking out for your best interests.

There is no reason to expect that another party would give full disclosure of something like a Bankruptcy. Sellers often do not think about or sometimes care about the consequences of their actions. Your agent cannot be held responsible for those things.

Regards,
Rodney Mason, NMLS #151088
Sr Loan Officer
Prospect Mortgage
825 Juniper St NE, Atlanta, GA 30308
Office: (404) 591-2453
rodney.mason@prospectmtg.com
Apply Online at http://www.rodneymason.com
Licensed in Alabama & Georgia

Prospect Mortgage offers a full selection of mortgage programs including:
Conventional | FHA | FHA 580-639 FICO | FHA 203K Renovation (Streamline & Consultant) | HomePath® | HomePath® Renovation | HomeStyle® Renovation | VA | USDA | GA Dream | Jumbo Financing
0 votes
Jamie Parker, Agent, Snellville, GA
Fri Oct 5, 2012
Short sales can try the patience of many, including the buyer, seller and agent. The process that is happening may not be your agents fault, as many times the short sale process goes only as smooth as the agent's knowledge of the process that listed it. I often tell my buyers prior to entering a short sale that I am familiar with the listing agent or that the list agent has a certain designation, therefore strengthening the chance we will close in a reasonable time frame.

As a Certified Distressed Property Expert, I try to expedite the closing process as much as possible. There are variables that you or your agent can't control- such as is the seller providing the documents the bank needs in a timely fashion. This can severely delay the process if it takes the seller a week or two to submit docs that were asked for.

The listing agent should have been upfront about the bankruptcy. They should know that short sales take a long time. I have called on houses that are in the same situation.

Finding another house that is a foreclosure, investor owned or a private seller would be your best option. You would be surprised at how many privately owned homes are out there to buy, even at low prices.

I hope this helps.

Jamie Parker, CDPE

Keller Williams Atlanta Partners

Active Life Member Million Dollar Club
404-483-7816

jamie@rockinagent.com


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0 votes
Annette Law…, Agent, Palm Harbor, FL
Fri Oct 5, 2012
Wkkm n 30044,
It is not uncommon for a citizen who has elected to enter into a short sale transaction to make comments just like yours. Even though their agent advised them, "You are entering the 'Wild, Wild, West of Real Estate, where there is an illusion of rules but anything can and does happen." you boldly go as though invincible.
-
You are presented with a MOUNTAIN of documents to sign that state,,,,"anything can and does happen and only 30% of the time will a short sale actually succeed." Then when what was predicted comes true the buyer wants to blame the agent. "The agent is not working hard enough!" "The agent is not looking our for my best interest!" "My agent doesn't communicate!"

Faded from your memory is the instruction you were provided at the very beginning of the short sale process that stated, "The buyer is the least significant player in the process." "Time can never be a factor." "The process is controlled by a 'black hole that consumes everything and nothing gets out. No information. No clues. No light!"

There is no one to blame but yourself. You were warned, but you ignored the GREAT BIG WARNING SIGNS. You choose to play the role that only wins 30% of the time. What did you really expect?

You are likely buying a $30,000 short sale.
How long has your agent been working with you?
How many homes did you look at together?
How many offers were written and submitted during this process?
Do you have any idea how many hours your agent has invested?

Now, lets actually take a look at what your agent will earn.
$30,000 x .025 (typical short sale compensation paid by the bank) = $750
$750 /2 (split with your agents broker = $375
$375 - $100 (expenses such as gas, printouts and the occasional lunch) = $275
That's it! You agent MIGHT make $275 after spending all that time with you.
Let's not forget, the same holds true for your lender. both your lender and your agent ARE sacrificing for those who purchase these low cap homes.
No good deed goes unpunished.
(you can use the same formula with your actual purchase price)

Don't know where to go from here? Apologize to your agent for second guessing her motives and intention simply because you are feeling some anxiety. Take a patience pill. If the lender was recommend by your agent, just get a new rate when it's needed.

When/if you close, get your agent a big closing gift. That will be the only good thing your agent will realize from this path you choose to take. She IS doing you a favor.
0 votes
Bruce, thank you for the reality check....
As a first time home buyer, I am learning really quick what is at stake when buying a short sale. When we put an offer for this house, it wasn't on short sale....as we were going back and forth confirming our offer and it's price, it went into short sale which my realtor after the fact informed us. As we waited on them accepting our offer and putting together the contract, we found out sporatically additional information such as the sellers had a second mortgage on the house.....it's going to be short sale......need to get the both mortgage banks to accept the lower price....and then the last kicker was that the sellers was filing for bankrupcy in september which delayed the closing process. As of right now, I will wait on the extended closing date and figure out if I need to just walk away from this home purchase.
Flag Fri Oct 5, 2012
Annette, I appreciate your feedback but you are assuming a lot of details that you have no idea what has transpired between my realtor and myself. I have to tell you that your assumptions are all incorrect and if I had to deal with a realtor like yourself, I would have terminated your broker/client relationship long time ago. As I'm saying this, your response hasn't help me in the least. I am here to find some help from experts so I can make the next best decision for my family.
Flag Fri Oct 5, 2012
Veronika Bar…, Agent, Roswell, GA
Fri Oct 5, 2012
Wkim,

Sorry to hear about all the troubles. Unfortunately, most of the short sale transactions have all sort of issues and most of the time, are out of control for buyer or buyer's agent.

I advise my buyers to consider a short sale purchase only if they are certain that this is the only house and are willing to wait as long as it takes to get it.

Talk to your lender about lock cost and how a pojected rate increase can affect your monthly payment.

If you don't have short sale approval letter from the seller's mortgage holder, don't lock the rate.

Good luck!
0 votes
Isabel Elses…, Agent, Alpharetta, GA
Fri Oct 5, 2012
I would not pay for a lock after seeing what my buyers received this morning at closing.
They are delighted to recieve a 2.75 interest rate on a 15 year mortgage. The house they purchased was 54k.

Good Luck with your short sale. I wish banks would process short sales a little faster.
0 votes
Sue Smith, Agent, Buford, GA
Fri Oct 5, 2012
Each short sale transaction is different with very few definitive answers. Unfortunately, the real estate agent has very little control over the timeline or approval features of it. The majority of the decisions being made are controled by the lender being shorted at the prospective closing. I tell my clients that it is much like rolling dice and hoping things will fall your way. It can be a very profitable outcome for the buyer if everything falls into place but there are no guarantees.

At this point you have to decide if the house is worth the risk and the wait. If so, then you will have to be patient and allow the transaction to complete the course. If not, then perhaps you should look for another home where the odds of closing in a timely manner are better.

Good luck in your endeavor!
0 votes
Doc & Ellen…, Agent, San Antonio, TX
Fri Oct 5, 2012
Short Sales try the patience of Saints! The banks continually change the rules, Sometimes Sellers mess things up (like filing for Bankruptcy), and closing dates are almost always guesses. Last minute delays are par for the course.

Ask your lender if they think rates will increase or decrease in the next month. If they decrease, you may do well to let your lock expire. If they increase, the delay will cost you some money. Unfortunately, even Ben Bernanke doesn't have a crystal ball to predict rates accurately.

If you feel your agent isn't representing you well, it may be time for a nice chat with her Broker. The Broker is responsible to make sure that all clients are well-served. It's not about the money - If she doesn't like Short Sales and isn't competent to do them, she shouldn't be doing them.

Good luck,

Doc Stephens, REALTOR
0 votes
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